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Casual Games Market Report 2007 Business and art of games for everyone

Cover Illustration from Zen of Sudoku © 2006 Unknown Worlds

© 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Table of Contents Welcome Letter from the Director All About Casual 3 What are Casual Games? 5 Online Consumer Profile It has been an exciting year for casual games—not only are more and more playing, but casual games have become the subject of mainstream news articles and large media companies have become interested in the space with more fervor The Art of Casual than ever. The buzz is not surprising, of course. Many following the industry have known for some time that more people play casual games than any other type of game. Now in 2007, this fact has become widespread knowledge. In addition, 7 History of Casual Games: 1972 - Present the industry has started to attract new platforms, studios and publishers. What was once an industry centered around PC and 9 Online Content Trends online web games has grown over the past couple of years into emerging casual areas, such as the LIVE Arcade and the . Inside Casual Right now, the market signs are good for casual games. Luckily the industry has remained stable due in part to casual 19 State of the Industry games being available on a wide range of platforms with the most successful business models encouraging high quality and 22 Designers innovative game content. 23 Casual Content Creation The connected casual games industry is a “multi billion dollar industry,” as you will see in detail later in this report – but what 24 How Development Works does that really mean? Ultimately, projections on the total industry size are of little use other than pleasant conversations with 25 Global Market Opportunities relatives. No matter the exact sizing or growth rate, the importance of casual games is unchanged—consumers love casual games and will continue to play casual games. Business of Casual Which brings us to the true measure of the industry: the millions of people casual 30 Market Business Overview games reach with high quality entertaining products that enrich their lives. 31 Business Models: Skill-based, Subscription, Trial-to-Purchase, , Mobile, Microtransactions, Retail, This report is focused on presenting the inner workings of the casual games industry as a central place for key information with existing CGA educational materials cross referenced throughout the report. For the purpose of this report, primary emphasis is placed on the online and connected 39 Company Profiles markets of PC, with secondary focus on Xbox LIVE and Mobile. Detailed workings of emerging Wii and PS3 casual console markets and handhelds will be addressed in later reports. Research 55 About the Casual Games Association data from the online casual games market has been collected directly from a variety of large 56 Method & Disclosures casual game portals, publishers and developers by the Casual Games Association through Pearl Research and Screen Digest. 57 Glossary 58 2008 Enjoy!

Cover Image from Zen of Sudoku © 2006 Unknown Worlds More information: http://www.unknownworlds.com/ Jessica Tams, Managing Director, Casual Games Association [email protected], +1 206-778-5134

Credits

© 2007 Casual Games Association. All rights reserved. Reproduction in whole or part of the Casual Games Market Report 2007 is strictly prohibited. See last section of this report for important disclosures and full copyright information. All About Casual All About Casual What Are Casual Games? What Are Casual Games?

asual games are video games developed for the mass games becoming one of the most common past times—so it consumer, even those who would not normally regard is not surprising that for many consumers casual games are Casual games are replacing Cthemselves as a “gamer.” replacing television for relaxing after work. television as an important stress Popular Online Casual Game Genres Casual games are fun, to access, easy to learn and Recently, electronic games have developed a stigma as being reliever after work and during Defining require no previous special skills, expertise or for young teenagers, but this year’s research shows that an Genre Examples Year4 regular time commitment to play. Many of these games are ever increasing percentage of those with online connections lunch hours Action & Arcade Asteroids, Pac-Man, Feeding Frenzy 1979 based around familiar game concepts that consumers played young and old, male and female are playing casual games. - Card & Board Solitaire, Mahjong, Hearts 1984 Casual gaming is about more than a consumer demographic or a 2008 will bring casual games Match & Remove , , Zuma, Luxor 1985 genre of games, casual games are defined by gameplay behavior into the everyday lives of Trivia You Don’t Know Jack, Family Feud 1995 in arcades or the family from childhood. In addition, Casual games may not have the sexy marketing and consumers Puzzle Collapse, Puzzle Inlay 1999 casual games are usually easy to pause, stop and restart with production budgets of the hard-core enthusiast market, but Breakout Ricochet Xtreme, 2001 little consequence to the player’s enjoyment. The most casual games reach an ever widening consumer base. This - Simulation & Strategy , Virtual Villagers, Tradewinds 2002 common introduction to casual games for most consumers reach to a broad demographic has made casual games a Nearly everyone plays casual is via Solitaire for Windows, which is the most highly desirable advertising mechanism. Word Scrabble, WordJong, Bookworm 2003 commonly opened application on Windows XP. 1 games at work and at home— The Casual Games Association expects 2008 to bring casual Click Management , 2004 200 million people play casual games online each month over games into the everyday lives of consumers with stand alone even if they do not admit it to Hidden Object Mystery Case Files, Dream Day Series 2006 the and the wide reach of pre-installed casual games massively multiplayer casual games and the integration of their boss and friends bundled with personal computers are contributing to casual gaming into existing social networking websites. Adventure Azada, Dream Chronicles, BeTrapped! 2007

Most Popular Online & Mobile Casual Games2 Gameplay Characteristics of Casual & Hard-Core Enthusiasts

Characteristic Casual Hard-Core Enthusiast Demographic All ages, male and female, 100% of population 18 - 35 year old males, < 15% of population

Where Play Home, work, airplane, transit stop Home

Why Play Fun, relaxation, escape Exploration, stimulation, adrenaline rush

Themes Family friendly scenarios Sci-fi, edgy violence, horror, suspense, war

1. on Windows XP 2. Tetris, Alexy Pajitnov, USSR, 1985 3. Bejeweled, PopCap Games, 2001 Play time intervals 5 - 15 minutes to complete a level 20 minutes - 2 hours to complete a level Solitaire is the #1 opened application on Best selling casual game across all platforms Original online casual franchise, 300 million Windows XP with an install base of over with over 60 million copies sold. downloads, 50 million mobile deployments Single player story 15 - 40 hours to complete Time to completion Single player story 15 hours to complete 400 million. and $100 million of consumer spending. Muliplayer typically played 5 - 40 hours/week Primary Platform PC, Mac, inexpensive console Game consoles, hi-end PC

Game Price Free - $19.99 $29.99 - $59.99

Game Selection Free , up-sells Marketing campaigns, reviews and previews

Hollywood Equivalent Sex and the City, Friends, ER, Superman Silence of Lambs, Reservoir Dogs, Aliens

1. For more information on , visit: http://www.microsoftcasualgames.com/. 4. QQ Games 3, Tencent, Inc. 5. Diner Dash, Gamelab / Playfirst, 2003 6. Mystery Case Files, , 2005 2. Solitaire, Diner Dash, Mystery Case Files and Bejeweled sales numbers reported directly from IP holder to the CGA. Tetris sales number from http:// China’s largest casual game with 273 Franchise with over $35 million of consumer Hidden Object became the most popular www.tetris.com/. The most downloaded casual PC game of 2006 was Cake Mania with 55 million downloads. 3. For more information on Asian markets, to ask permission to use the data or to purchase a full report, pleased contact Pearl Research at research@ million active users of the IM tool QQ, with spending and 200 million downloads is one gameplay mechanic of 2007. The franchise pearlresearch.com or call +1 415-738-7660. 3.17 million peak users for its games service. of the most successful casual properties. boasts over 1.2 million copies sold. 4. Defining year is signified by when electronic genre originally became popular, including arcade and home consoles—which pre-date online gaming. Casual Games Market Report 2007 3 Casual Games Market Report 2007 4 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. All About Casual All About Casual Online Consumer Profile Online Consumer Profile

Heaviest play times are right after Under 21 : Tweens & Teens1 21 - 35 : Young Adults Top Reasons To Play Casual Games dinner from 7pm - 9pm and during lunch from 11am - 2pm aised surrounded by technology and computers, hese are the kids of the 1980s who grew up in malls Rtoday’s youth have no concept of life without the T and arcades. They have less free time than young - internet, video game consoles, DVD’s, Wi-Fi or . adults in the past and are often separated from family stress relief This generation was raised with electronic toys that linked and friends due to job relocation after school. They are with games, such as V Tech and Leapfrog, and toys that comfortable augmenting their social interactions with take a break link to online virtual worlds. Their parents were teenagers online electronic personas and networks. They are drawn Casual games appeal to people of all ages, in the 1970s when the first video game consoles hit the to high quality game experiences, but do not always have gender and nationalities challenging market, so the entire family is technology literate. the cash to spend. Websites: Neopets, Club Penguin, Nick.com, MiniClip, Websites: Shockwave, , NHN Portals, bored - Kongregate, AddictingGames, Cartoon Network, The N. Yahoo! Games, MySpace, . Monetization: With less access to online payment Monetization: While young adults are not quite the free- mechanisms and watchful parents, advertising, loaders their younger counterparts are, young adults do Casual games are usually played in a series subscriptions and micropayments have become the like to play for free. Many males in this demographic are Gender & Age of short time increments, from five minutes dominant business model with this demographic. game enthusiasts and spend most of their gaming dollar to 20 minutes—it’s common for people to on more intense games. play one level after another for many hours

1 Internet Usage (USA) - he enthusiast console business has all the money, the casual business has all the players. The core console market only has 15 million members but they happen to have a $1,000 a year habit.” Female 51.7% 48.3% Male “T 2 Subscription and community users average Nolan Bushnell Over 35 yrs old 53% 47% Under 35 7 - 15 hours of online play a week3

- 35 - 50 : Middle Aged 50 - 103 : Golden All Casual Games Consumers3 Most casual gamers do not identify them- Female 51% 49% Male selves as gamers. “I’m so ashamed, I just iddle aged consumers spend more time online than n the 1970s, these consumers were parents of young played for four hours, but I can’t stop!”2 Many other demographic—and they spend more Ichildren and teenagers. They grew up with pinball time playing online casual games. These consumers were machines and may have been one of the 30 million parents Over 35 yrs old 62% 38% Under 35 teenagers and young adults during the 1970s and were who purchased an Atari for their children (at a price of - the original consumers of the Atari. Thus they are most $500 in 2007 dollars) or might have taken their kids to comfortable and open to the similar casual game play some of the first Chuck E. Cheese entertainment centers. from the Arcades and Atari. These consumers have been Websites: ClubPogo, PopCap.com, RealArcade. Paying Casual Games Customers3 The enthusiast gaming market, comprised raised and conditioned to spend money on games. Monetization: Consumers in their Golden years are mostly of young males, almost universally Websites: RealArcade, Shockwave, Big Fish Games, . play casual games—but casual gamers rarely drawn to strong community and packaged deals due to Female 74% 26% Male com, Pogo.com. having time on their hands and being used to paying for play the violent games favored by the Monetization: Big Money. Middle aged consumers are the entertainment. Over 35 yrs old 72% 28% Under 35 enthusiasts cash cow of the casual games industry—not only do they play online, they are more likely to purchase high value items.

1. For more on Teens & Tweens: Kate Connally, Kyra Reppen, Kenny Rosenblatt, Sion Lenton, “Teens & Tweens”, Casual Connect 2007, http:// 1. Internet usage straight average of public research from: Atbirton & Edison, Neilsen, Mediamark, emarketer, Harris Interactive, comScore Media Metrix. podcasts.casualconnect.org/. 2. Quote from Peggle player Heidi Jensen, this is indicative of many casual gamers. 2. From Nolan Bushnell’s Keynote at Casual Connect Seattle 2007. Listen online: http://podcasts.casualconnect.org/. 3. From major online portals. Subscription play time varies significantly based on method of distribution and community features. 3. For more on the demographics of online websites, see company profiles on pages 39-54. Casual Games Market Report 2007 5 Casual Games Market Report 2007 6 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Pre-print preview. Do not distribute. Do not quote. The Art of Casual 1972 - Present History of Casual Games 1972 Atari launches the coin operated arcade craze with Pong 1977 Apple II is launched, first computer with color graphics 1979 Atari launches Asteroids and starts the Golden Age of the Arcade he casual games market and Pac-Man is released on the arcade began with the launch of a simple “bat and ball” 1980 T video game, Pong which launched in coin-op launches Donkey Kong for the arcade arcades in 1972, as a home console in 1974 and then on 1981 the Atari 2600 in 1977. Both Pong and the Atari became a Great North American Video Game Crash makes way for games from staple in homes across Europe and . Arcade 1983 Nintendo launches the NES with Super Mario Brothers games were institutionalized in 1978 with the advent of 1983 Asteroids, the first of a series of space shooter arcades. At Microsoft packages Solitaire and Freecell with its MS Windows the same time, the Apple II, the first computer with color 1985 graphics is launched, Nintendo opens up shop and the The success of the arcade begins to wane release of Pac-Man solidifies the casual games market. As 1986 the 1980s ensue, large scale shopping malls spread across Nintendo launches the Game Boy with casual hit Tetris America, each with an arcade filled with teenagers. Those 1989 arcade teenagers of the 1980s are today’s 30-40 year olds, Microsoft packages an updated Solitaire with Windows 3.0 developing the next casual market wave. 1990 1992 launches 3D and creates the reign of the first person shooter 1993 Myst launches and becomes a phenomenon on PC was a huge year for the game business—100 million people self identified themselves as a game launches the PlayStation player—either playing at home or in coin-op arcades. There were 600,000 coin-op arcade games 1994 “1981 The virtual pet phenomenon begins with the launch of Tamagotchi in the US. In a three year period, the market shrunk. Games got violent and we lost women gamers, games got 1996 too complex and we lost the casual player. Unfortunately, we have a lot of amnesia when it comes to our history.“ The Internet booms and becomes a household success 1996 Nolan Bushnell, founder of Atari1 1996 Total Entertainment Network gaming portal launched Paypal is launched Following the great North American video game crash of Casual games found successes on PC and handhelds, but 1998 1983 and eventually the decline of the arcade by the early were relegated to obscurity. That all changed with the advent 1999 Mobile gaming launches with the i-mode service by NTT DoCoMo 1990s, casual games found success in the PC market with of the internet. Casual gaming had a new platform and a new become a PC best seller Solitaire and Freecell packaged with , the opportunity to reach fans that had been dormant for over a 2000 , Myst, and later The Sims. During that time, decade. The internet, online payment transactions, and the PopCap Games launches the first modern casual game,Bejeweled Tetris brought casual gaming from Russia to the handheld brought life back to the industry and in 2001, 2001 market on the Game Boy, and later a wave of virtual pets the first modern casual gaming classic was born in Bejeweled. Microsoft launches Xbox LIVE and the online console multiplayer world is born expanded the view and potential of casual electronic games. Since then, the casual games market has had wave after wave 2002 ScreenLife introduces the first DVD board game with Scene It However, one of the biggest impacts on the casual games of successes. In 1999, online casual game portals were taking hold, and consumers could access a suite of games at home or 2002 market came not from within but from another genre. ID MySpace is launched and online social networking blossoms Software’s changed the face of video gaming at their desks at work. With the recent launch of Xbox LIVE 2003 for a generation. With the inception of the first person Arcade and the Wii, and the future release of PS3 Home, Microsoft launches Xbox LIVE Arcade shooter, a new generation of gamers were born and violent casual games look like they have settled in for the long haul. 2004 games began the rise to take over the console and PC world. 2004 Nintendo launches the DS Sony launches PSP with casual hit hilst we are not strictly a casual developer, we’re noting a lot of convergence opportunities, and 2005 Microsoft launches Xbox 360 LIVE Arcade “W LIVE Arcade/PS3 digital platforms are the start of that”. 2005 2006 Nintendo launches the Wii with Wii Sports Martyn Brown, Studio Director, Team 17, Creators of 2006 Casual hit Brain Age soars Microsoft expands games on Vista to include and Mahjong 1. From Nolan Bushnell’s Keynote at Casual Connect Seattle 2007. Listen online: http://podcasts.casualconnect.org/. 2006 Casual Games Market Report 2007 7 Casual Games Market Report 2007 8 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. The Art of Casual Online Content Trends

ver the past couple of years, several sociological and recreational trends Ohave occurred that have affected both the size of the casual games market and its consumer demographics. Many of these trends are North America specific, but their effects can be felt throughout the world. Over the past few years, gaming has become a part of everyday vocabulary and has made its way back into mainstream culture. With High speed internet the advent of WiFi and the upgrades in Instant gaming gratification mobile and PDA technology, people are spending more of their time online and connected by technology. Online Content Distribution Trends ! Casual gamers were everywhere at the turn of the century - they were just in hiding. Many who had been “The underlying goal of our industry’s recent innovative offerings is to move casual games 2001 exposed to video games in the 70’s & 80’s had fond memories, but video games were something from from being a secret industry to becoming a true mass market phenomenon.” their childhood since after the North American video game industry crash there was little game content which appealed to young and old alike. Widespread internet access and e-commerce technology of the new Paul Thelen, Founder of Big Fish Games millennium created a fertile ground for the wild growth of the casual genre—bringing new high quality and innovative content such as Bejeweled directly to consumers’ PCs which they could not find anywhere else via a consumer friendly trial-to-purchase or free-to-play advertising supported delivery mechanism. Since the inception of MySpace, social networking sites have boomed and online identities and rankings have been a test of Community: Club Pogo “cool.” The growth of the recreational seniors market has created a new media consumer, whose grandchildren introduced Club Pogo, a premium subscription-based service, launched in July 2003 to augment the existing Pogo.com them to email, the internet, digital photography, and now gaming. 2003 was an important step in integrating community interaction with the online gaming world—proving a strong The content case studies listed below began in detail on page 11 and show how trends have affected game popularity over the and loyal customer base is possible for online portals. While many have tried to create online communities to past few years. Each case study focuses on a different game and its rise to success. pursue lucrative subscriptions, Club Pogo remains one of the strongest subscription based communities on the internet. They achieve this by offering strong social rewards and community features for players returning to the service and allowing members to play exclusive content without advertising or intermissions. Microtransactions: Nexon’s Kartrider & Maplestory, IT Territory 2004 Microtransactions is listed twice in our trends section—as it penetrates gameplay, distribution & monetization. Content Trends Microtransactions cemented itself as a viable and very lucrative business model in 2004 initially designed to avoid rapant piracy—where the game is free and users are encouraged to purchase virtual items for small The Online Craze: Bejeweled increments of money. Microtransactions have proven very successful in Asia and Russia, but have yet to take a strong hold in Western Europe and North America. 2007 saw significant investment into virtual currency 2001 gaming, so look for maturation in Western markets in 2008 & 2009. Legitimacy: Scrabble 2002 Monetizing the Male Casual Gamer Microtransactions: MapleStory 2006 Before 2006, if you had asked any casual games professional—they would have told you that casual games were for grandmas or bored housewives.1 Few realized at the time, that men and teenagers were also playing—they 2003 were just not paying directly. While those new to the casual games industry may not be shocked, we assure you Story Mode: Jewel Quest this was big news: boys defiantly play casual games, even if they don’t admit it. The turning point was Xbox 2004 LIVE Arcade where online casual games were being swooped up by male teenagers and young adults. Character Development: Diner Dash User Generated Games: Indie & FunWare 2005 2007 Virtual Worlds, Electronic Networks, Community Games, no matter what you call it—casual games are taking Hidden Object: Mystery Case Files the lead in monetizing the non-paying online userbase who create their own fun. User generated games range from online games people create themselves: “Indie Games” (AddictingGames, New Grounds)—to the 2006 game of life as shown in your online credibility board: “FunWare” (FaceBook, MySpace).

1. While bored housewives are mentioned frequently with relation to casual games—we assure you that from the women we know raising children— they are anything but bored. Recent research leads to stress reduction and needing a break is the primary motivational factor for playing casual games. Casual Games Market Report 2007 9 Casual Games Market Report 2007 10 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Pre-print preview. Do not distribute. Do not quote. The Art of Casual The Art of Casual 2001: Bejeweled 2001: History of Bejeweled

By Justin McElroy companies they showed the game to were alarmed by the un- opCap Games launched Diamond Mine Bejeweled paved the way for the online casual game craze timed mode, which they believed didn’t require any skill. Pin 2001 which has proven to be the most he guys from PopCap really weren’t worried when they For this particular quandary though, Kapalka decided that successful online download-driven casual Toriginally named their company Sexy Action Cool. It was mother knew best. “We were having fun playing it and my games franchise to date. Diamond Mine was an inside joke, lifted from a poster for the Antonio Banderas mom was having fun playing it,” he said. “Our theory was, re-named to Bejeweled for distribution on flick Desperado. But the way they saw it, their company name if my mom likes it, who doesn’t normally like games, there the Microsoft Zone where it out performed wouldn’t be heard much, anyway. They would just be a small must be something there. She may not know good game all other titles at a rate of five to one. developer in the shadows of the major portals who would design, but she knows what she likes.” host their games. At the time of Bejeweled’s launch, most Although the Web-based application was popular, PopCap online websites did not realize the primary All of that, of course, was before the world spent an estimated still had one major problem: It had no way to make money customer was not teenage boys and even six billion hours playing their little game of matching up from it. This was at a time when the dot-com boom was ending though Bejeweled was flying off the virtual jewels. and advertising revenues were swiftly tanking. PopCap’s plan shelves many didn’t understand or want to Although that first game would become Bejeweled, exactly had been to license the game to high-traffic sites and then admit this was the future of online games. how the game’s basic concept was created has been lost to the make some revenue from the advertising visitors would see as Bejeweled paved the way for thousands of annals of time. As Jason Kapalka remembers it, John Vechey they played. As of 2001, that plan was no longer viable. games, with the revolutionary mantra of fun mass market friendly games for everyone. When PopCap started, we used the “Mom Test.” If our own moms could As said by Jason Kapalka: “Successful casual figure out a game without our help, that was a good sign. If they kept games avoid titles with any combination of the words: blood, war, or assault, and themes playing it after we left the room, that was even better. featuring robots, bugs, skulls, or robot bug had seen a basic Java game with the same basic premise as skulls.”1 PopCap then decided to take a risk—and the repercussions Bejeweled, only “extremely bad.” It was so crude, in fact, that are still being felt to this day. They created a deluxe version The original Bejeweled above and below are distributed on PC, the page had to be manually refreshed every time a move was Mac, iPod, PDA, Handheld, Mobile, XBox LIVE Arcade and scratch tickets. of their already popular Web game with better graphics, made. Unfortunately, casual games historians who might like better sound and more modes that they would sell. But in to go take a look at this drawing version of the game are 2001, there was no set path or pricing structure for this sort completely out of luck. of venture. “We’ve since tried to go back and find that page, for historical E-commerce was in its infancy, and it was unclear whether purposes, but no one’s been able to find it,” PopCap Chief people would be willing to whip out their credit cards to Creative Officer Kapalka said. “This legendary proto- buy an intangible product online. Bejeweled thing has never actually been proven to exist. I believe it was there, but no one’s been able to identify it.” How much they would charge for their product was crucial. A friend in the industry had suggested that they price the game No matter what its origins, the game was badly in need of an at $20, but that seemed high even to the guys who created overhaul if it was to be a viable product. Fiete began updating it. “He said that the cheaper a game is, the less people think the game-play to something more fluid, and Kapalka thought its worth,” Kapalka said. Trusting his advice, they settled on about what could replace the colored blocks that the game the two-sawbuck price tag, put Bejeweled Deluxe online and had been using as pieces. “The idea was to find something held their breath. that you could PopCap then decided to take have seven of that To help track their progress, Fiete created a small desktop a risk - and the repercussions clearly all belong application that made a “ka-ching” sound every time someone together, and yet purchased Bejeweled Deluxe. At first, the ka-chings were are still being felt to this day are sort of different dishearteningly slow. But slowly, they began to mount, one in terms of color every couple of hours, one every minute. Before long, the and shape,” Kapalka said. “Jewels came to me right off of the halls of the PopCap offices were rarely without the public’s bat.” ringing endorsement of their game. Numerous other enhancements had to also be put in place, “Eventually, it got so annoying that we had to turn it off,” like the inclusion of a meter that lets players progress between Kapalka said. levels, and a timer that ticked down and added more pressure to the game. Of course the un-timed version was included in Editor’s Note: A version of this interview originally appeared on the final product—something that Kapalka suggests might www.gamezebo.com. have been integral to its success. He said that many of the 1. Jason Kapalka’s “10 Ways to Make a BAD Casual Game”, Casual Connect Magazine, Summer 2006, http://mag.casualconnect.org/. Casual Games Market Report 2007 12 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Pre-print preview. Do not distribute. Do not quote. Pre-printPre-print preview.preview. DoDo notnot distribute.distribute. DoDo notnot quote.quote. The Art of Casual The Art of Casual 2002: Scrabble 2003: MapleStory

ave Walls did something amazing ublished in 2003 by Nexon in , clothing, among other items that are Din 2002—he created a Scrabble “Scrabble legitimized the PMaple Story quickly emerged as one updated regularly. There are almost game to be distributed online via the of the top casual games in Korea with limitless combinations possible to trial-to-purchase distribution method. online casual games industry, over 14 million users. The game was then create new ‘looks’ for player avatars, Scrabble was licensed from Hasbro pushing the industry from launched in most Asian countries in the contributing to the game’s appeal. The by Atari and developed by Funkitron. shareware into something big following years and expanded globally game also has an easy learning curve, In retrospect, with what we know now brands could get behind.” to US and Europe. As of October 2007, and new players can master it in a about the ability for online casual games the game has over 67 million registered couple of hours. to reach consumers this may seem like Garrett Link, General Manager, players worldwide. Since 2004, IT Territory has an obvious development, but back then, RealNetworks’ GameHouse Studios offered games incorporating Microtransactions represent an important development as creating a downloadable game based microtransactions to the Russian on a big brand, where up until then no a way to monetize consumers who would otherwise not pay Scrabble customers returned market—representing over $24 big branded games existed was a huge the ability to try a product fully before for content via trial-to-purchase or subscription offerings step in legitimizing this new emerging purchasing, consumers returned to to purchase other million in yearly revenues market. purchase more products online. casual games The appeal of Maple Story is in its Microtransactions are an important Scrabble’s success showed that in The success of the Scrabble brand game graphics, item variety and that it is free- development inside the casual games addition to consoles and CD-ROMs, a is still a lesson for the casual games to-play. The cute anime-styled graphics space to monetize consumers who game property could be developed for industry in the appeal of a known attracts a diverse gamer base including would otherwise not pay for content. brand coupled with high production many female and younger gamers. As a online consumption. For a more detailed report on the Asian values. microtransaction based game, there is a Scrabble not only sold well, but it wide selection of items, accessories, and games market, visit Pearl Research: brought in new consumers to the For more information and some fun http://www.pearlresearch.com/. marketplace who would have otherwise stories, listen to Garret Link’s Casual not ventured to online casual portal Connect Seattle 2007 session: “Where websites. After a good consumer Did We Come From”, experience of an easy download and http://podcasts.casualconnect.org/.

© 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Pre-print preview. Do not distribute. Do not quote. Pre-print preview. Do not distribute. Do not quote. The Art of Casual The Art of Casual 2004: Jewel Quest 2005: Diner Dash

n 2004 Jewel Quest, developed by iWin.com, revolutionized online casual games by successfully integrating story-telling iner Dash was an unexpected hit of 2005 and the publishing model has proven successful—with many new Iand a greater purpose into a casual game. Using a proven gameplay mechanic, designer Warren Schwader used this greater Dfirst casual game title to introduce a character-driven publishers entering the market. purpose to keep people playing and playing and playing. story which strongly appealed to the female demographic In September 2007, PlayFirst launched the fourth episode in purchasing casual games. Over the period of 2005 - 2007, the the Diner Dash series, Diner Dash: Hometown Hero, which 2004 & 2005 saw a flurry of developers Diner Dash games have been one of the most downloaded added avatars, multiplayer, microtransactions, level packs integrating quests into their gameplay series on personal computers with over 200 million downloads and user-generated content. It was a bold move to bring mechanic in an attempt to capitalize the worldwide and $35 million in consumer spending. 2006 community features which have been proven successful in rapidly emerging market in much the saw the genre mature with strong sequels and spin-offs the Asian and Russian markets to the Western markets. same way Jewel Quest and Mahjong Quest from PlayFirst as well as a flurry of games from the industry PlayFirst’s creative director Kenny Shea Dinkin strongly did. After four years, the quest mechanic attempting to replicate the click management mechanic and believes that we are just at the beginning of appealing to the has become such an integral part of the the strong female character. casual games industry, many forget that If imitation is the sincerest form of flattery, at one time quest mechanics were not common. Diner Dash should considered itself overly flattered In addition to the character driven story and click management mass market consumer—and it is our responsibility to create gameplay mechanic, Diner Dash also pioneered the role content that rips through the notion that video games are of the dedicated publisher in casual games with Gamelab just for teenage enthusiasts. He compares video games today filling the role of the developer and PlayFirst acting as the with Vaudeville entertainment of last century: publisher. “Vaudeville—with its cheap budgets and fast, zippy creative most games now Traditional publishing models were a revolutionary concept cycles (sound familiar anyone?)—managed to be a rich at a time when most developers were self-funded and ground for experimentation, and it ultimately influenced integrate quests distributed their wares directly to online portals. In the four the songwriters who broke through the barriers and gave us years which have passed since the founding of PlayFirst, the the first mainstream, mass-market, popular musicals.” Jewel Quest brought a greater purpose to the gameplay— which kept people playing and playing

Over the life of the franchise, Jewel Quest has generated more than $27 million in consumer spending, spawning sequels, launching on multiple platforms, and continually attracting new customers The original Diner Dash opening screen Diner Dash introduced strategy through Diner Dash 2 introduced more complex from around the world to the addictive introduced the powerful female character. chaining of actions and prioritizing strategy including new tasks such as the mop gameplay. Jewel Quest has shipped more customer types based on their personality. and bucket and twists on gameplay. than four million units across platforms, including about two million on PC, to two million mobile units, and more than 100,000 via Xbox LIVE Arcade.

Jewel Quest shipped over 4 million units Diner Dash Hometown Hero expanded Strong storylines, evolution of narrative and With Wedding Dash, PlayFirst launched the gameplay to include avatars. With My Waiter, main character growth keep the players first “Dash” extension title and introduced players can dress up their in-game . hooked on the brand. a new character, Quinn, to complement Flo. Casual Games Market Report 2007 15 Casual Games Market Report 2007 16 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Pre-print preview. Do not distribute. Do not quote. Pre-printPre-print preview. preview. Do Do not not distribute. distribute. Do Do not not quote. quote. The Art of Casual 2006: Mystery Case Files

Hidden Expedition: Everest Hidden Expedition: Titanic fter the success of Mystery Case Files, Big Fish Games released six sequels and iterations in 2006 and 2007. Not Aonly was each successive game well received with steadily increasing popularity, sequels were released was an almost unheard of speed, with the franchise now boasting over 1.2 million copies sold. Pictured above: Hidden Ex- pedition: Everest and Titanic.

Agatha Christie: Death on the Nile Dream Day Series he series inspired numerous other games and while many were successful, Oberon Media’s adaptations Dream TDay Wedding (February 2007) designed by Cara Ely, and Agatha Christie: Death on the Nile (May 2007) de- signed by Jane Jensen, developed by Flood Light Games in Belarus were the most successful commercially with over 30 million downloads for Oberon’s hidden object casual game titles as of fall of 2007.

Mystery Case Files Revitalized Adventure Games ystery Case Files took 2006 by , an exciting new genre for the casual game consumer to enjoy—along with a rich and flexible game mechanic Dream Chronicles Azada to stimulate and inspire new games that weren’t just theme packs of the ream Chronicles, developed by Kat Games in , uses a mechanic similar to Mystery Case Files where the M Duser solves puzzles using items found in the scene to advance the detailed and compelling story. It is in a way original block-buster. With this new standard for polish, 2007 saw the maturation of a resurgence of the old Lucas and Sierra style adventure games which appealed to a similar demographic. Weeks after Dream Chronicles was released, Big Fish Games released their next step in the Mystery Case Files mechanic: this game genre and the return of what many would call the adventure game. Azada—a series of puzzles intertwined with an entertaining story. Casual Games Market Report 2007 18 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Pre-print preview. Do not distribute. Do not quote. Pre-print preview. Do not distribute. Do not quote. Inside Casual Inside Casual State of the Industry State of the Industry

ight now the market signs for casual games are very good—fueled by the explosive growth in online media consumption. Established markets in the casual games industry Opportunities are expanding at a rate of 20 percent a year. R lectronic entertainment is still in its relative infancy. With The fact that women are buying casual games Ebusiness models still forming and evolving, we have yet to truly hit the mass market with video games. As the medium in such large numbers is especially significant matures, we expect to see the audience continue to widen, considering that electronic games have Commitment to Casual with greater numbers and varieties of people discovering the traditionally been associated with young males fun and diversion of electronic games. With many untapped lthough the casual games industry has grown significantly over the past 7 years, until consumers, business model structures, and gameplay opportunities still open in the industry, especially in areas such as social recently, the online casual games market has been somewhat underground and unseen A networking games and casual MMO’s, it is important that new developers in the market continue to innovate and grow in new to many of the large, core publishers, other than Microsoft and EA. This is starting to change. directions. It is doubtful that anyone will succeed in the long term with undifferentiated content in a saturated market. In recent months, , Eidos, Vivendi, THQ and all announced casual games initiatives. In addition, MTV recently spent $600 million in game industry acquisitions and MTV announced their plans to spend $500 million more, $100 million of that specifically on Market Stability casual games.1 Even Google has gotten in on the act. The launch and success of the Wii and Xbox LIVE Arcade really changed the marketplace and he North American video game crash of the 1980s brought with it valuable lessons: newcomers to the industry, believing many publishers who, up until now, have focused on other genres and platforms are starting Tthat video games offered a quick way to make a lot of money, had rushed a lot of low quality games to market on a myriad to see market potential in casual gaming. This should lead to higher production values, re- of competing platforms which resulted in disaffected consumers and the crash of the market. purposing of tools and back-catalog titles, as well as the development of new business models. Since then, the video game industry has gone through tremendous upheaval, eventually straying from its casual gaming roots to focus budgets and attention on the enthusiast hard-core game consumers. As a result, the industry has shifted from a mass market appeal, concentrating its efforts on building increasingly complex games for devoted game-playing enthusiasts. New Business Models Recently, the industry saw a bubble in the mobile gaming world as analysts and venture capitalist predicted huge revenues ne of the biggest strengths of the casual games industry is innovation. This does not just apply to gameplay ideas, but from wireless games. The assumption was that, given the increasing number of cell phones, electronic gaming would grow as Oalso to business models. Over the last year, a number of successful business models have solidified in casual games. never before. While some have enjoyed great success in mobile gaming, the initial forecasts has proven overly optimistic, as With consumers shifting focus to electronic media, advertisers have found new opportunities and many of them have turned poor quality content coupled with restrictive, carrier-controlled distribution, initially limited market expansion. to games. The in-game advertising experience is much like that of prime-time television where dynamic rich media are displayed between game sessions, offering a high CPM (cost per thousand impressions) and in fact can produce ten times One of the most exciting things about the casual games industry is its ability to appeal to a more revenue than traditional static ads. wide variety of people: males and females, old and young alike Micropayment transactions are a virtual item selling based business model with a strong hold in the Russian and Asian game markets. Originally popularized in Korea as a way to combat piracy and encourage payments, the Korean market is The online downloadable industry avoided many of the issues which plagued other sectors because of built-in rewards to now approximately $1.5 billion in revenues per year. On average, the microtransaction market is generating more revenue the developer for innovation and high-quality game experience, combined with distributors merchandising just the best content as a solution to screen and shelf space limitations.2,3 The number of games released to game portals has stabilized in the past few years with portals limiting the number of games offered within their screen space. By limiting the amount We must remember that, as new players enter the market—some in an effort to of electronic “shelf space,” the portals have effectively reduced the exposure of lesser quality games. In an added effort to make a quick buck—it is possible that the overall standard of quality will begin maintain customer loyalty and encourage innovation, portals such as Big Fish Games and Reflexive have recently introduced partner programs through which developers receive ongoing compensation for the revenue generated by the customers they to diminish as it has in the past boom-to-busts send to the portal. per user than the core enthusiast’s market. EA’s Pogo.com picked up on the trend at the end of 2006, We must remember though that, as new developers enter the market—some in an effort to make a quick buck—it is possible selling individual gems for about a nickel each to augment avatars and improve gameplay. After just nine months, Pogo that the overall standard of quality will begin to diminish, as it did in the past. What is more, struggling publishers may begin has sold over 100 million of these gems. When Diner Dash 4: Hometown Hero released in October 2007, it incorporated a slashing prices in an effort to gain market share, which in turn could create additional pressure to create cheaper, lower quality built-in microtransaction and multiplayer model. Such transactions have proven to be a highly effective way of engaging the games. In such an environment, knock-off or clone games may further erode margins and diminish consumers’ satisfaction consumer and monetizing gaming products. with the overall casual games experience. This is especially a risk in retail where there is no trial-to-purchase model. Other new models on the scene include user generated content (UGC), episodic content, and soft barter transactions. “Coopetition”—companies who are both cooperator and competitor at the same time brings another risk to the industry. MiniClip, NewGrounds and AddictingGames are on the leading edge of user generated content for casual games. Together, Since its inception, the casual games industry has thrived, partly because of and partly in spite of the fact that publishers they have over 70 million unique users each month and give their users the ability to make their own content with some share distribution to increase consumer and game accessibility. In an effort to create differentiation and control distribution offering an advertising revenue sharing program. Most user generated content creators are currently using ’s channels, distributors have begun to limit their supply channels, which has reduced distribution of top-tier content. While Flash, but Microsoft’s XNA is opening up a whole new avenue for developers looking to create their own games using a more this has reduced the profitability of publishers who also have distribution channels, this has allowed independent publishers flexible system. Concerns have been raised in the industry about the potential of user generated gaming content hurting the to be more competitive in attracting top-tier developers because of the wider distribution networks of the independents. industry as a whole by competing with established developers, however, it is much more likely to produce cool new gameplay 1. Steve Youngwood, “Big Media & Casual Games”, Casual Connect Seattle 2007, http://podcasts.casualconnect.org/. mechanics and new innovative ideas that established developers can then polish and take to the next level. 2. Erik Goossens, “Games Selection, What’s The Right Balance?”, Casual Connect Magazine, Summer 2007, pg 13, http://mag.casualconnect.org/. 3. Mark Cottam, “Merchandising at Retail”, Casual Connect Magazine, Summer 2007, pg 32, http://mag.casualconnect.org/. Casual Games Market Report 2007 19 Casual Games Market Report 2007 20 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Pre-print preview. Do not distribute. Do not quote. Pre-printPre-print preview.preview. DoDo notnot distribute.distribute. DoDo notnot quote.quote. Inside Casual Inside Casual The Casual Games Industry Casual Game Designers

he core of the casual games industry is made up of two groupings: content creators and content distributors. Content hile you may not have heard of many of the designers listed below, the industry wouldn’t be the same without them— T creators include developers and publishers: the developers create the idea and build the game; publishers provide Wcollectively they are responsible for creating and driving revolutionary and often disruptive game developments. Just as funding, help polish game, shop it around for distribution, and provide marketing assistance. Content distributors include professional athletes make complicated and nearly impossible feats look effortless, there is a great deal of hidden complexity portals and traditional brick-and-mortar retailers: the portals are websites or console interfaces that enable consumers to and skill required to make great casual games. And we know this—because it seems that the same people are consistently access the games; retailers are traditional stores that typically sell the games on a disc inside a retail box. enriching our industry. Unfortunately, these very people who truly make the difference in the industry are often overlooked, As with any creative industry, the majority of professionals are involved with the creation of game content. This section so in an effort to make right, below is our list: provides details about the professional content creators and content distributors which comprise the casual games industry. Casual Game Designers

Nolan Bushnell Due in a large part to the work of Nolan, 100 million people self identified employees = median size of reported = number of divisions or companies Designer & Electrical Engineer themselves as a game player—either playing at home or in coin-op arcades. Atari Console, 1972 There were 600,000 coin-op arcade games in the US in the early 80’s. 100 casual game division or company 1 1100 with active strategies to address the casual games market 1 Wes Cherry Your gut is correct: Solitaire is the #1 opened application on Windows XP. Designer & Software Engineer Bringing games to the PC was the stepping stone for modern online based Windows Solitaire, 1985 games—allowing consumers to move easily from Solitaire to Bejeweled. Professionals in the Industry 1 Alexy Pajitnov Unique and addictive puzzle game based on a classic geometric puzzle board n n n n n n n n n n n Content Creation n n n n n n n n n n Designer & Software Engineer game “Pentominos”, developed at the Russia Academy of Sciences in Moscow. n n n n n n n n n n (Development, Publishing, , Tetris, 1985 To this day Tetris is still the #1 selling electronic casual game. n n n n n n n n n n Localization) Company Growth: Leading Independents Located in n n n n n n n n n n 1 Jason Kapalka Bejeweled is a high quality web-based game which kicked off the online casual n n n n n n n n n n n Distribution the Pacific Northwest n n n n n n n n n n (Distributors, Portals, Retailers, Designer game craze in 2001. Bejeweled has become the gold standard of online casual Bejeweled, 2001 games. n n n n n n n n n n Customer Service, Xbox LIVE Arcade) n n n n n n n n n n n n n n n n n n n n n n n n n n n Tools, Services n n n n Jane Jensen Jane entered the casual games industry to bring robust story and character n n n n Designer & Software Engineer development to consumers, her notable casual game titles have been Inspector n n n n n n n n Gabriel Knight, 1993 Parker (2003), BeTrapped! (2004) and Agatha Christie (2007). 1 n n n n Company Composition n n n n Warren Schwader While quest and story modes are now second nature to casual games, n n n n n n n All-In-One (Developer, publisher & portal under one roof) n n n n n n n n Designer & Software Engineer Jewel Quest was the first game to integrate story progression in a way that n n n n n n n n JewelQuest, 2004 significantly increased the player’s attachment to the game. n n n n n n n n n n n Original Game Development n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n Platforms & Porting n n n n n n n n n n n n Nick Fortuno & Kenny Shea Dinkin Jewel Quest brought story progression to the casual gamer just a year earlier, n n n n n n n n n n (Localization, Mobile & Xbox LIVE Arcade n n n n n n n n n n n n n n n n n n n n n n n n Designers Diner Dash revolutionized character development and progression in casual n n n n n n n n n n Development) n n n n n n n n n n n n n n n n Diner Dash, 2005 games. Consumers embraced the well designed Flo character. n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n IT, Web Development n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n Andy Megowan, Designer & Engineer Cake Mania was the most downloaded casual game released in 2006. With a n n n n n n n n n n n 1999 2000 2001 2002 2003 2004 2005 2006 2007 n n n n n n n n n n Operations Israel Evans, Artist unique art style and innovative gameplay, Tradewinds has a strong and loyal fan n n n n n n n n n n (Business, Executives, Customer Service, Sales & Marketing) n = 15 employees Tradewinds, 2003. Cake Mania, 2006 base. worldwide employees for independent companies located in or Consistently high quality game design—with fast paced release schedules. The Big Fish Games Studio Content Creation, Development Studio with major offices in the Pacific Northwest: RealNetworks, Big Fish Mystery Case Files Series has been developed at the BFG Studio which has sold http://www.bigfishgames.com/ n n n n n n n n n n Games, PopCap Games & Oberon Media. over 1.2 million copies. Profile on page 39. n n n n n n n n n n n Programers n n n n n n n n n n n Designers Innovative and genre defining game play—which has revolutionized and n n n n n n n n n n PopCap Games Studio n n n n n n n n n n = average game developer jump started the online craze. Bejeweled, Zuma, Bookworm & Peggle. More n Artists http://www.popcap.com/ n n n n n n n n n n 2 information on pages 11 and 12. n n n n n n n n n n n Testers $77,000 salary in Pacific Northwest n n n n n n n n n n n Producers source: Enterprise Seattle GameHouse, a division of n n n n n n n n n n One of the largest game studios in the world releases approximately 15 original RealNetworks n n n n n n n n n n game titles each year - many of which are best sellers. Profile on page 46. http://www.gamehouse.com/

1. From Casual Games Association records. 1. Send your favorite designer some fan using: [email protected]. It is interesting to note that many designers are also engi- 2. Average salary calculated by Enterprise Seattle, http://www.enterpriseseattle.org/. neers, Paul Thelen, founder of Big Fish Games, is also an engineer and designed, coded and developed BFG’s first set of games. Casual Games Market Report 2007 21 Casual Games Market Report 2007 22 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Pre-print preview. Do not distribute. Do not quote. Pre-printPre-print preview.preview. DoDo notnot distribute.distribute. DoDo notnot quote.quote. Inside Casual iNNOVATEInside Casual Casual Content Creation How Development Works

ne of the biggest attractions to new developers looking at entering the casual games industry is the low development cost here is no shortage of product examples or information online and O in comparison to the potentially high return on investment—a top ten casual games franchise can generate upwards T in print about making games which appeal to 18 - 35 year old core The Move: Core to Casual of $10 million. Casual games cost far less to make than the typical hard-core game, and have a much shorter development enthusiasts. So lets’s focus on how creating casual games differ from A personal account from a software engineer: 1 cycle. In addition, many casual developers start online because of the ease and flexibility of updating versions, in comparison creating games for the core enthusiast gamer. to other platforms. It was July 2003 when I signed my first contract with a casual games publisher and proceeded to Developers usually have one hit for every five to ten failures. Only an average of 25 percent of games recruit a couple of my good friends to make our 1 1 first casual game. I thought at the time—with six submitted to the average portal and distributors are accepted for distribution. Casual Game Content Creation of us crammed into my tiny home office—that this was just a brief diversion before venturing A top quality, online download game usually requires one to three programmers and one to two artists over the course of 6 Casual game development focuses primarily on the core game mechanic and gameplay being fun. back to making “real” games. Back then, I would months. There are lots of choices in terms of programming tools, but the most popular are PopCap’s C++ Framework, C++, 1 have never imagined that I would still be very Microsoft’s Visual Studio, Adobe Director and . Recently, Microsoft XNA is beginning to pick up supporters. All Development teams value generalists who can work in many styles and involved in the casual gaming industry today or of these tools are fairly inexpensive which lowers the barrier to entry and ensures gameplay is given top priority. 2 many systems. that the group recruited to work in our barely functional, makeshift office would still be making 6 month to 1 year production cycles mean less room for error on each casual games as well. Developers Report1 project, but with multiple projects, your eggs aren’t all in one basket. 3 As our casual game development studio became Casual and core developers have similar salaries at established studios, more established, moved into a real office, = revenue from trial-to-purchase and Online trial-to-purchase casual game 4casual bonuses are larger. released a couple of games, and began working on high-profile projects, moving back to “real” advertising which developers receive production budgets typically range Gameplay perfection is important: on release, portals usually give new 90% games became less and less alluring. Although I games three days to move from “New Games” to “Top 10”, in a catalog from the Top 15 retailers in western between $50,000 and $500,000 5 did miss my software engineering days (I always of 1,000 games, not being on the Top 10 generally means very few sales. markets liked searching for bugs and creating cool Add: iPod, Mobile, PDA3 Production values are strong predictors of sales, hype and licenses have physics simulations), the attraction of managing The Casual Games Association estimates the release of over 500 less of an impact. Initial recognition doesn’t always equate to more sales multiple projects simultaneously—with products 2 6 commercially viable casual game titles distributed online each year. $20,000 because consumers are able to try before they purchase. that appeal to more than just teenage boys—was These commercially viable games are often able to repay prudent undeniable. Still is, in fact. development budgets and represent approximately 25% of the I had not realized that there is so much to like Add: Set-top Box (Hotel) 1 completed casual game titles.2 Team Breakdown about the casual games industry. The people $10,000 are very friendly, excited and passionate about The majority of online portals feature active catalogs of over 1,000 The average casual game development team is similar to a sub-team in making games for everyone. Industry insiders games and on average cycle 75 to 300 new games into their catalog Add: Xbox LIVE Arcade the core space working on a level or a major gameplay feature 1 rarely complain about politics in the office and each year.2 the long hours they are forced to work. And get $230,000 Programmers: 2 full-time, 1 part-time this: My mother, my sister—even my father will additional revenue from offering trial- There are typically 1-2 gameplay programmers as well as shared engine play our games. Add: to-purchase games in a brick-and- Handheld (DS, PSP) and tools programmers. I suppose then, that it’s not surprising that 10% we’re starting to see our industry really take mortar retailer as reported by developers $300,000 Artists: 2 full-time, 1 part-time shape. Although casual games have been the Artists typically help create placeholder gameplay art and then join the ugly stepchild in the gaming industry for many Add: Wii project after the prototypes have been completed to create final art. years, our recent, impressive growth has enabled Most successful developers initially us to begin connecting the various links in the develop online downloadable $300,000 to $2 million Producer: 1 part-time value chain, turning what once was a scattered casual games first—and then when Producers guide the original development process and then see the handful of independent developers, publishers they are blessed with a hit, port to Add: Next-gen Console Game project on through usability, user-testing and porting. Producers (if and distributors into a vibrant, self-sufficient, other platforms not also designing) will typically work on 2-3 projects at a time. professional community. And the pay-off for all of $15 million us is that we are doing better work—and making Designer: 1 part-time more money—than ever before. Just because casual games take less time to develop, have less technological requirements, and are Designers have a more pivotal role on day-to-day production than in a What we’re seeing is that when all of us come core project—because the game is so focused on gameplay. together—developers, publishers, distributors— cheaper to make, doesn’t mean they are easier to make – they just require a different skill set. Typically we strengthen the links in the value chain and casual games require a higher percentage of development time to be spent on design and usability and Testers: 3-5 part-time improve our chances of connecting with an Testers typically join the process at major milestones and near the end ever-widening consumer base. And if we do that, artistic iteration than hard-core video games of development to ensure levels are the right of challenge and fun. the inevitable result will be healthy, sustainable Because of the strong focus on gameplay, testers take a pivotal role. growth for many years to come. 1. From data reported to the Casual Games Association by casual developers and publishers. submit your story: [email protected] 2. Game release numbers calculated by submission and acceptance ratios reported directly to the CGA by major online portals and content creators. 3. Cost to create basic reference build port, this does not include the numerous builds required for each handset or handset compatibility issues. 1. From Casual Games Association records and information submitted to the Casual Games Association by members. Casual Games Market Report 2007 23 Casual Games Market Report 2007 24 © 2007 Casual Games Association. See section page for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Pre-print preview. Do not distribute. Do not quote. Pre-print preview. Do not distribute. Do not quote. Inside Casual Inside Casual Global Market Opportunities: Western Europe Global Market Opportunities: Eastern Europe

he Western European casual games market is stable with a well established value chain. Western Europe offers an important espite starting from nothing in 2003, Eastern Europe is experiencing revenues of $10 million yearly for trial-to-purchase Tdevelopment center for the casual games industry and a strong consumer base with a number of large portals including Dgames and $24 million for online microtransactions. The trial-to-purchase market is currently growing by 20 percent each AOL, MSN, Orange and the Zylom network delivering significant revenue. Western Europe saw a significant customer base month (yes, each month). Today more than 100 professional casual game companies are located in Eastern Europe. A large increase in recent years when content was fully localized into French, Italian, German and Spanish (FIGS). amount of the recent boom can be credited to improvements in internet infrastructure, increased broadband connectivity, Consumers in Western Europe respond well to mobile offerings. We are unsure why consumers in the USA do not react the and improved payment infrastructure for online transactions. same way, but it might be something ingrained into the culture such as the prevalence of mass-transit or the carriers lack of The main contribution which Eastern Europe brings to the casual games industry is content development. The area is known standardization of delivery and payment systems. Skillgaming is very strong in Europe, with a majority of the revenue from for excellent school systems that emphasize math and sciences, while fostering creative thinking. While some think of Eastern this business model coming from this region from King.com and GameDuell. Microtransactions and virtual currency have European development as below par, the results prove otherwise. Consider: 1. Tetris was designed and developed in Russia, 2. gained a foothold in the region as seen with local offerings of Habbo Hotel and Bigpoint, but have yet to become the primary Over 30 percent of the Top 10 Games in 2006 were partially developed in Eastern Europe and Russia and 3. Games developed monetization method of the region as they have in Russia and Asia. The trial-to-purchase price point is higher in Europe than in Eastern Europe and Russia comprised 3 of the 10 best selling titles on RealArcade’s portal in the first 10 months of 2007. in the , with games selling for 20,00 € which translates to approximately $28.80. All Top 10 calculations have been calculated using data from http://www.game-sales-charts.com/.

Western Europe Hot Spots Eastern Europe & Russia Hot Spots ’s largest city is a mix of old and new—a center for politics and research science along Kaliningrad Realore Studios - developers of Jane’s Hotel & Turtle Odyseey Platformer. Berlin with artists seeking a liberal community with low cost of living. GameDuell (more information Russia Intenium - game development studio for Hamburg based publisher. Germany on page 31) a prominent skill-based gaming company operates in the area. Puzzle Lab - developers of the hits Puzzle and Magic Inlay, which are #9 and #10 in the overall In-spite of the high cost of living, Copenhagen is a desirable city to live in because of their Krasnoyarsk Top 10 list for RealArcade, with 550 weeks combined.1 Dekovir - developers of Ballistic which in Copenhagen 1 family friendly and equal rights culture. RealNetwork’s GameTrust development studio Russia 2004 was on RealArcade’s Top 10 list for 70 weeks. Sugar Games - developers of Rainbow Web 1 (profile on page 46), andUnity 3d, a toolset for developers are both located in Copenhagen. which was on RealArcade’s Top 10 list for 63 weeks. Ireland has long been a hot spot for language localization for the gaming industry. This Kyiv, Dnepropetrovsk, Friends Games - content development studio purchased by Oberon Media in October of 2007. Dublin along with agreeable tax advantages and a reasonable cost of living make Dublin a prime Rivne, Crimea, Absolutist - content development, porting and outsourcing. Nikitova - major outsource and Ireland location for international operations. PopCap Games’ (more information on pages 11 and Lugansk porting company. Arkadium - the technology and development branch for NYC based casual 12) mobile, localization and European support are located in Dublin. Ukraine games company. Enkord - Eastern European publisher. Meridian 93 - developer. Leskovac Paprikari - developer of Mortimer Beckett and the Secrets of Spooky Manor which was on Einhoven, Amsterdam, RealNetwork’s Zylom (profile on page 46), the leading localization and distribution entity in 1 Nijmegen Western Europe operates out of Einhoven. Also located in The are: Streamline Serbia RealArcade’s Top 10 list for 49 weeks in 2007. The Netherlands Studios, Chello Media, Spill Group, Endemol, SkillHill, TMG Company, and ZC Funcraft. Minsk & Brest Awem Studio - Cradle of Rome and Star Defender developer. AliasWorlds - well known for it’s Germany, outside of Berlin and Hamburg, is also home to many new media and game Belarus Snowy franchise. Flood Light Games - developer of Agatha Christie: Death on the Nile. IT Territory - Russian distributor and publisher of online games (profile on page 49). The larg- Germany developers including T-Online, Eidos (who purchased Blue Fish Media in Spring of 2007), Moscow est Russian online games portals are located in Moscow including Mail.ru, Yandex, and Rambler Click and Buy, Wirecard, Phenomedia Publishing, Vodafone, and . Russia Internet and the content creators Gajin Entertainment, 1C Publishing, and Shape Games. Helsinki is a center for innovative new business models in Europe including microtransctions Helsinki from Sulake, the developer of Habbo Hotel, and mobile gaming companies: Digital Chocolate, Novosibirsk Alawar Entertainment - publishers of many hit games including Magic Ball and Stand O’ Food 1 RealNetwork’s Mr.Goodliving, (profiles on page 46) and the developer of Sparkle, Myth Russia which was on RealArcade’s Top 10 list for 42 weeks in 2007. Funding in 2007 has strength- People. ened Alawar’s operations and publishing arm. CTXM - leading development house for Xbox LIVE Arcade platform with 14 released titles The new media center of Germany geographically between Copenhagen & Amsterdam has Riga (Rīga) offers publishing and development services on variety of consoles, also provides producing Hamburg more CGA members than any other city in Western Europe, and is home to over 50 developers Latvia Germany and publishers including AOL, , , Exit Games, King.com (profile on page services for Eastern European developers. 41), Intenium, Eidos and Bigpoint. Sandlot Games - Sandlot’s development studio for Cake Mania, the #1 downloaded game of 2006. IT Territory Nord (Alterlab) - developers of Believe in Santa. Nevosoft - Russian distributors England is a long time center for the game development community with Codemasters, St. Petersburg London and developers who in collaboration with RealNetworks produced the hit game Mysteryville Yahoo! Europe, King.com (profile on page 41), Eidos, MumboJumbo, EA Casual Games, Team Russia which was on the Top 10 of RealArcade for 146 weeks in 2006 & 2007.1 Kenjitsu - development 17, developer of Worms, Miniclip, and Big Wig Media, developers of Scruffs. studio associated with Nikitova, purchased by Oberon Media in October 2007. The casual gaming industry’s center is in Paris with the Boonty, Cafe.com (profile on page 47), Vladivostok Hotlava - developers of the 7 Wonders series, purchased by MumboJumbo on 31 July 2007. Orange/Wanadoo (profile on page 51), , Ubisoft and Focus Home Interactive. Russia Zaragoza Kat Games the developer of Dream Chronicles (more information on page 18) is located in Vologda Playrix (was Terminal Studio) - developer of Rise of Atlantis. Spain sunny Spain. Russia Warsaw Codeminion - developer of Magic Match. Poland 1. For more information on international language localization, read Heather Chandler, “International Language Localization”, Casual Connect Magazine, Summer 2006, http://mag.casualconnect.org/. 2. The Casual Games Association hosts a yearly conference in Western Europe in February. 2008 in Amsterdam, and 2009 in Hamburg. 1. All Top 10 calculations have been calculated using data from http://www.game-sales-charts.com/. Casual Games Market Report 2007 25 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Casual© 2007 Casual Games Games Association. See last sectionMarket for full copyright, trademark Report and important disclosure 2007 information. 26 Pre-print preview. Do not distribute. Do not quote. Pre-print preview. Do not distribute. Do not quote. Inside Casual Inside Casual Global Market Opportunities: North America Global Market Opportunities: Asia Pacific1

1 orth American development is centered in the Pacific Northwest; North America Employee Distribution n n n n n n n n n n ith an online games market worth $2.5 billion in 2007, Korea, China, India, and also represent significant NVancouver and , Canada; New York; and throughout market opportunities for game publishers. Although often lumped together into one Asian market, they cannot be n n n n n n n n n n n NYC W and San Francisco Bay Area, California. n n n n n n n n n n treated with one blanket solution or as one region because such significant cultural and business differences exist between Pacific Northwest. With RealNetworks (profile page 46), Big Fish Games n n n n n n n n n n n Pacific Northwest n n n n n n n n n n them. While smaller than Japan, Korea, and China, the Thailand and Vietnam markets are interesting because companies (profile page 39), Oberon Media (profile page 45) and Microsoft Casual Games n n n n n n n n n n n California are starting to generate revenues from investments. While there has been much written—and the international community (profile page 42), Nexon (more information on page 14) and WildTangent, the n n n n n n n n n n n Other understands much about the Japanese and Korean markets the Chinese and Indian markets are up and coming, so we will Pacific Northwest is home to many all-in-one casual games companies—those n n n n n n n n n n focus on these. who have development, publishing, distribution and portal arms all under one n n n n n n n n n n umbrella. A number of well respected development studios are located in the n n n n n n n n n n The Chinese gaming industry has already seen remarkable growth, from an insignificant market in 2000 area including PopCap Games (more information on pages 11 and 12) and China to in excess of $1 billion in 2007. The casual games market is intensely competitive, with portals such as Sandlot Games, with many up and coming developers releasing solid titles into the market in 2007 such as GoBit who released Netease, Sina, Sohu, and Tencent all offering a similar offering of games. Casual and web games in China are played by Burger Shop, HipSoft, who released Build-A-Lot, Gogii Games, developers of Nanny Mania, Toybox, SpinTop, Article 19, nearly 47 percent of online gamers and top casual games average 800,000 users at a time. Like Eastern Europe, internet and developers of Carrie the Caregiver, Lucia and Threewave Software. broadband growth has the most impact on the growth of this market. Approximately 54 percent of internet users in China are under the age of 30. Canada: Montreal & Toronto. UbiSoft made headlines in 2007 with it’s announcement of opening a casual games division, located in Montreal. VMC (profile page 53), the company which certifies Xbox LIVE Arcade, has over 300 employees in the While China has a robust games market, most of the top advanced casual games played in China are actually developed in Montreal office. Korea due in part to many of the locally-created titles emerging as clones of existing products which lack the innovation required to be a hit. Additionally even those developed in Korean have a distinctly uniform look. These factors mean potential New York. With the solid base of advertising and games as media in New York, companies in this area are generally focused on for Western publishers with new content to enter the market if they keep in mind the need for Chinese localization, content, branded content and high-quality pop casual games. MTV Networks, Nickelodeon (profile page 43), Oberon Media (profile multiplayer offerings (single player is much less popular with Chinese users) and are willing to deal with the challenges page 45), Gamelab (profile page 48), LargeAnimal (profile page 50), RealNetwork’s Game Trust (profile pg 46) and Slingo related to protection and an ever changing regulatory system. (profile page 53) are in the New York City area. 2008 is expected to be a pivotal year for the India games market for a variety of reasons including that California: Los Angeles and San Francisco Bay Area. California is a central location for technology and media innovation and international companies are now considering combining their offerings in China with expansion into a is a hotbed for content creation with Last Day of Work, iWin.com (more information page 15), PlayFirst (more information India nearby country. India has a large middle class population of 81 million, with growing Internet and broadband consumption. page 16) and Shockwave (MTV profile page 43), , GSN, iPlay (Oberon Media profile page 45), In addition the recent Xbox360 launch in India combined with local and international players experimenting with different Casual (profile page 40). Digital Chocolate, Macrovision’s Trymedia, Activision (profile page 47), and MumboJumbo. business models is encouraging. Another key reason is the launch of the gaming portal zapak.com by Reliance, one of the Mid-West & South. Texas, Chicago and North Carolina have been long-time game development hubs, so these are locations largest business groups in India. Zapak plans to offer free casual games, downloadable for $1 to $5, email, blogging, TV, which lend themselves well to developers and those distributing games at retail such as MumboJumbo (profile page 44) and and forums. The revenue model will be based on a mix of advertisements, subscription, and pay-per-use fees. In addition, Merscom, who are both developers and retail distributors. Porting and advergaming companies also thrive in these areas Zapak plans to offer an in-game economy allowing for the selling and trading of virtual items. Still India can be an extremely because of the strong local bases of knowledgeable game developers. challenging market with game operators struggling to monetize games and one must deal with infrastructure issues that plague the country as well as price sensitive consumers. Often when technology companies think about relocating to an area Economic Impact which will provide an environment for solid growth, the first thought is 1 Scotland or Ireland, areas which have made great strides in recruiting technology companies with impressive offers. In North Major Publishers & Distributors America, the Canadian government has taken the lead to encourage technology companies to invest in the technology sector. This investment has proven successful with major developers opening up development companies in Montreal and Vancou- Publishers GoPets South Korea gopets.net 2 3 ver, Canada. There are over 6,000 game developers in Vancouver and 5,100 in Montreal. Nexon South Korea nexon.com NHN South Korea nhncorp.com Casual Game Retail Distributors and Retailers Distributors 9you China 9you.com Netmarble, CJ Internet South Korea netmarble.com Brick and Mortar Distributors Activision Santa Monica, California profile page 47 Gamania Taiwan gamania.com MumboJumbo Dallas, Texas profile page 44 Gigamedia China gigamedia.com Brick and Mortar Retailers Neowiz, Pmang South Korea neowiz.com GameStop Grapevine, Texas .com NHN, Hangame Japan, China, Korea hangame.com Best Buy Minneapolis, Minnesota bestbuy.com Ourgames China ourgames.com Target Minneapolis, Minnesota target.com Shanda China shanda.com CompUSA Dallas, Texas compusa.com Softworld Taiwan softworld.com Wal-Mart Bentonville, Arkansas walmart.com 1. For a more detailed analysis of the Asian market to ask permission to use the data or to purchase a full report, pleased contact Pearl Research at 1. From Casual Games Association records. [email protected] or call +1 415-738-7660. Also see: “Opportunities, in China and India”, Casual Connect Magazine, Summer 2007, pg 54, 2. Vancouver developer numbers from the Canadian Consolate General. 3. Montreal developers from Investissement Québec. http://mag.casualconnect.org/. Casual Games Market Report 2007 27 Casual Games Market Report 2007 28 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Business of Casual Market Business Overview

Over 200 million people play casual games o be successful, any industry has to figure out how Most of the casual games business models fit within two main to make money from its products or services. The groupings: each month over the internet T question of how much to charge is a critical one since to a large degree it determines the viability of the industry: Consumers purchase boxed products Charge too much and you may scare away your customers Retail from retail outlets at a price ranging from forever; charge too little and you may predispose consumers $5.00 to $35.00. In addition to the retail transaction, game to paying less than your products are worth. developers can make additional money through in-game Of equal importance is the question of how to make money. advertising and advergames. Choosing the right business model may mean the difference between effective long-term monetization, on the one hand, Most portals offer a choice to the and a rapid descent into oblivion on the other. Online consumer of multiple ways to pay based on many different business models. Online business One of the interesting things about the casual games market models include: advertising supported online games, skill is its ability to maintain and foster many different business games, in-game advertising, micropayment transactions, models. Some websites charge per downloaded game, others and advergaming. Some games mix retail and online offer unlimited subscriptions for a set fee per month, and monetization by offering the base game in retail and then some supply advertising supported games for free. Many of offering consumers additional content through online these online casual games can also be purchased at retail transactions. stores for the PC, as well as in Wii, DS and PSP versions.

Casual Market Share by Connected Business Model1 imagine if everyone in... Western Skill-based

2 Western Subscription 30% source: CGA Shanghai, Paris, City, billion = total casual game Western Trial-to-Purchase New York City, London, , $ 2.25 market in 2007 5 (Online PC & Console) source: Pearl Research, Screen Digest, CGA { Los Angeles, Beijing, Moscow, Western Advertising year over year growth expected Amsterdam, São Paulo, Siberia, for established markets 20% 3 * source: CGA 23% 3 Canada and source: Screendigest Worldwide Mobile

4 4 sat down at a computer 45% Asian Casual source: Pearl Research (Microtransaction opened an internet browser & Subscription) and played an online casual game

1. A note: Microtransactions and subscriptions are typically the dominant business model for online games in Asia and the dominate model in Russia, with many reports focusing so directly on Western Countries, business models for Western Countries were often extrapolated to include the entire market. In Western Markets, games will often employ Skill, Subscription, Trial-to-Purchase, Advertising, Retail and Mobile—all for one game. Thus each game will recognize revenue from many sections of the pie. 2. Skill-based, Subscription, Trial-to-Purchase & Advertising revenue calculated by the CGA based on revenues from major online portals and publishers. 3. Mobile revenue calculated by Screen Digest include card, board, and puzzle games only - this does not represent the entire mobile markets. Although as the market matures and consumers are given content proven to have a high customer satisfaction, the CGA believes the casual market share will increase. 4. Microtransaction & Subscription revenue in Asia calculated by Pearl Research. Calculation includes some advanced casual games. *we know you are thinking about the kangaroos taking over Australia 5. Total market includes casual games for all PC and console (ie Xbox LIVE Arcade) including when those games originally for online distribution are packaged and sold in brick-and-mortar retailers. Casual Games Market Report 2007 30 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Business of Casual Business of Casual Business Model: Skill-based Games Business Model: Subscription

ith skill-based games, players pay a small Skill-based gaming generates a large lectronic Arts is the envy of the casual games industry. In Much of the online Trial-to-Purchase content offered is Wentrance fee to participate and compete EJuly 2003 Club Pogo was launched, and has proceeded to identical across multiple websites, subscription programs against other consumers in a game of skill. (Note: amount of revenue per customer attract over 1.5 million subscribers, each paying $5.99/month offer a key advantage in that they encourage customer loyalty If it is purely a game of chance, with little or no skill or $34.99/year for advertisement free play and community by creating differentiation. While this is great for online required, it would be considered gambling.) The features. Success inside subscription services depends heavily websites, because of varying multiplayer technologies, it player who wins the contest is awarded the collection on creating a large community of subscribers. To date, becomes difficult for developers to distribute gaming of entrance fees minus a small transaction fee shockingly few have been successful generating sufficient content on a wide variety of websites—which has been key retained by the operator. Skill-based games consumer spending1 revenue from this model. to sufficient revenue for developers. Since real money is involved, games are played Compared to other models, subscriptions normally generate a large directly in the consumer’s web browser using a secure 2006 $315 million connection with code in place to prevent cheating. amount of revenue per customer and encourage community interac- tion, increasing the stickiness of the website Skill-based games provide a very strong 2005 $210 million community element because of the source: Screen Digest Currently there are two main subscription models: interactive nature of the head-to-head 1. Consumers typically pay a set fee to play all the online More Information competition and tournaments games they want—much like a premium cable subscription. 1. Andrew Pedersen, “Portal Report & Strategy”, Casual Skill-based games market share1 Trial-to-Purchase quality games often represent part of Connect Seattle 2007, http://podcasts.casualconnect.org/. “premium” content, along with access to message boards, In order to have enough liquidity or people competing 2. Kate Connally, Kyra Reppen, Kenny Rosenblatt, Sion in each match or tournament (to make the venture community features and player profiles. Club Pogo and Lenton, “Teens & Tweens”, Casual Connect Seattle 2007, both viable and profitable), companies must scale to 24% Others Shockwave UNLIMITED use this subscription model. http://podcasts.casualconnect.org/. a significant player base. Because of the requirements 2. Consumers subscribe to a bulk game package where they 3. Adeo Ressi, “What’s Holding us Back? A Case For for a large player base, only three main skill-based pay a fixed amount each month for a predefined number Standards”, Casual Connect Seattle 2007, http://podcasts. gaming operators have emerged. Fun Technologies of games along with a discount for additional games casualconnect.org/. 76% is based and operates mainly in Northern America purchased—similar to the mail-order “album of the week” King.com 4. Paul Heydon, “What is the Holy Grail in Online Games”, under the brand name WorldWinner. King.com is popular a decade ago. Typically consumers who purchase a FUN Technologies Casual Connect Magazine, Summer 2007, pg 26, based in the United Kingdom and operates in Europe large number of games participate in subscription programs. GameDuell http://mag.casualconnect.org/. and North America. GameDuell is based in Berlin RealArcade and Big Fish Games offer these monthly bulk and operates mainly in Germany. subscriptions. User experience is somewhat akin to gambling, which makes some a bit uneasy. While perfectly legal in most Free Pogo.com Club Pogo Subscribers states in the USA—Alaska, Arizona, Connecticut, The top three vendors hold a 76% share of the market. Females 35 - 49 are Requirements for liquidity create a market which is difficult n n n n n n n n n n n n n n n n n n n n Delaware, Florida, Illinois, Iowa, Louisiana, Maryland, n n Under 18 to enter. Although, markets without much exposure to skill n n n n n n n n n n Under 18 n n n n n n n n n n the biggest spenders Missouri, Montana, South Carolina, South Dakota, n n n n n n n n n n n n n n n n n n n n Tennessee, and Vermont have limited the ability of gaming may allow more operators to enter. n n n n n n n n n n n 18 - 34 n n n n n n n n n n n 18 - 34 on Club Pogo source: Screen Digest n n n n n n n n n n n n n n n n n n n n skill-based gaming companies to operate games for n n n n n n n n n n n 35 - 49 n n n n n n n n n n n 35 - 49 cash. n n n n n n n n n n n n n n n n n n n n Persons over 50 spend the n n n n n n n n n n n 50 + n n n n n n n n n n n 50 + n n n n n n n n n n n n n n n n n n n n most time on Club Pogo n n n n n n n n n n n n n n n n n n n n ^ ClubPogo subscribers are older and spend more money than those who participate in the free Pogo.com offering source: Electronic Arts

< Club Pogo’s community features include Minis, popular avatars pictured to the left which have ^ Instruction page located on worldwinner.com ^ King.com employs strong brand licenses from pop culture which contributed to its users are often publicized on television averaging over 12 hours of play each week.

1. Numbers calculated by Screen Digest. For more information, to ask permission to use the data or to purchase a full report on Skill-based Games, contact Piers Harding-Rolls at Screen Digest http://www.screendigest.com/, +44 (0)20 7424 2820. Casual Games Market Report 2007 31 Casual Games Market Report 2007 32 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Business of Casual Business of Casual Business Model: Trial-to-Purchase Business Model: Advertising Supported

rial-to-Purchase is the de facto Online casual games have monetized a demographic who would have onsumers visit online destinations Advertising supported web games offer an easy and non- monetization method of online that offer casual video games which T never purchased games. The trial has served as an important C committal way for consumers to become acquainted with games casual games. While many other re-education counteracting stereotypes of the enthusiast hard core gamer they may play directly within their web methods bring in significant revenue, browsers or online application. Games by sharing advertising revenue. Because of this high level of comfort, historically this is how royalties to expired, consumers may purchase after a 60 minute trial, does may be singleplayer or played with many new to casual games will play developers were calculated, hence other consumers online in a multiplayer Consumers may play the games online the game. Games sell between $5 and not mean that these are “lost revenue for free—for as long as they want. solely online to avoid spy-ware and ad- the high level of attention inside the $30—those with longer trials and from opportunities”. Much to the contrary, arrangement. ware. industry. Large portals with their well-established premiere studios sell on the upper because consumers spend so much Online web games are created by either consumer bases have the most success Unfortunately, professionals inside the Games are downloaded using a web end, those with shorter trials or lower time with each game—they will want professionals or are user-generated. with advertising supported web games; space often marginalize and take for browser or a console browser such as production values on the lower end. to make sure they have the perfect Those created by professionals are those most popular with consumers granted the importance and impact of Xbox LIVE Arcade. Consumers are Many portals offer the consumer an game for them before purchasing. sometimes pared-down versions of include Yahoo! Games and MSN Games. this wide-reaching, consumer-friendly allowed to play these games for a limited option to continue playing with high- Furthermore, many of the non-paying more fully-featured games used to Websites popular for user generated distribution and monetization method. trial period, typically 60 minutes for CPM embedded advertisements. One consumers are younger and thus do upsell a more fully featured trial-to- web games include AddictingGames, Because of this, they do not always online games, and feature limitations important note is that just because not have the disposable income, but purchase version. New Grounds and MiniClip. ensure they receive adequate revenue when they do they will turn into paying for console games. After the trial has consumers do not purchase a game Those produced by users are normally sharing on the web version of their customers. Since there is no download required, created and shared “just for fun”, there is little risk that a consumer will online casual games. Game Launch Average Time Revenue Trial-to-Purchase although many online portals have inadvertently download malicious Performance1 Position in Top 10 Multiplier Consumer Spend In a hit driven business, recently begun rewarding the creator software such as spy-ware or ad-ware. Blockbuster # 1 100 weeks 20 $ 10 million it is not wise to release Hit # 1, 2 20 weeks 8 x $ 4 million products before adequate Advertising supported online offerings Good # 3, 4, 5 8 weeks 4 x $ 2 million usability & user testing unique users demographics Above Average # 6, 7, 8 5 weeks 1 x $ 500,000 AddictingGames 23 million 70% under 18 Average # 9, 10 2 weeks $ 100,000 Neopets 12 million 50% under 18 5 : 1 New Grounds 500,000/day tweens & teens Games Released Game Revenue Ratio at which a “top tier” 50% under 21 n n n n n n n n n n n Hit | Blockbuster n n n n n n n n n n n Hit | Blockbuster Kongregate 1 million n n n n n n n n n n n n n n n n n n n n 90% under 35 n n n n n n n n n n Games Released n n n n n n n n n n Games Revenue n n n n n n n n n n n n n n n n n n n n production studio with a n n n n n n n n n n n n n n n n n n n n Microsoft LIVE n n n n n n n n n n n n n n n n n n n n past hit will release 13 million 90% under 35 n n n n n n n n n n n Non Hit | Block- n n n n n n n n n n n Non Hit | Block- Messenger n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n buster n n n n n n n n n n buster another hit n n n n n n n n n n Games Released n n n n n n n n n n Games Revenue Miniclip 34 million tweens & teens THE 2% Myth ^ Users playing advertising supported web games are more ^ Microsoft LIVE Messenger offers online games to over 13 mil- Online casual games have only a 1 - 4 percent conversion rate of consumers buying the game after the trial. While this is likely to be male and are significantly younger than other lion players each month. Titles range from card & board games technically true, most casual game players download multiple games. To understand this distinction, lets assume 10 games online casual gamers. source: Self-Reported to multiplayer games. were downloaded by 3 consumers and 1 purchase resulted, this would be a 10 percent conversion rate. However, this would also mean that 30 percent of consumers purchased a game. 3 consumers More Information 3 happy consumers 1. For more information from Shockwave, Microsoft and RealNetworks about advertising strategies: CGA Advertising 10 downloads 10% conversion of trial to purchase Group, “Beyond Downloads”, Casual Connect Magazine, Winter 2007, pg 20, http://mag.casualconnect.org/. 2. A look into creating more content than will fit into the industry’s rigid Top 10 lists: Tony Leamer, “The Long Tail” ,Casual 1 purchase 30% of consumers purchased a game Connect Magazine, Winter 2007, pg 24, http://mag.casualconnect.org/. 3. Overview of one Microsoft’s casual offerings including advertising which they share revenue with developers: Andy Peter- More Information son ,”Services Drive Gaming’s Future”, Casual Connect Magazine, Summer 2007, pg 8, http://mag.casualconnect.org/. 1. Tony Leamer, “The Long Tail”, Casual Games Magazine, Winter 2007, pg 24, http://mag.casualconnect.org/. 4. Teens & Tweens are more likely to play on advertising driven websites: Kate Connally, Kyra Reppen, Kenny Rosenblatt, 2. Erik Goossens, “Games Selection”, Casual Games Magazine, Summer 2007, pg 13, http://mag.casualconnect.org/. Sion Lenton, “Teens & Tweens”, Casual Connect Seattle 2007. http://podcasts.casualconnect.org/. 3. Michael Mei, “Turning Demos into Sales”, Casual Games Magazine, Summer 2006, http://mag.casualconnect.org/. 4. “Try and Buy Isn’t Dead”, Casual Connect Seattle 2007, http://podcasts.casualconnect.org/. 1. Casual games sites—which often represent just a portion of a larger portal—often generate the majority of their revenue from advertising. Shockwave 1. All statistics on this page are reported directly to the CGA by major online portals and top tier developers. Because of limited distribution, Top 10 lists has long shared advertising revenue with developers, Microsoft and RealNetworks announced they would begin sharing advertising revenue at CGA’s con- and revenue are becoming increasingly independent. Average time on the Top 10 should be used as a guide, not a rule. ference in Seattle in June 2006. Casual Games Market Report 2007 33 Casual Games Market Report 2007 34 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Business of Casual Business of Casual Business Model: Mobile Business Model: Microtransactions

icrotransactions are big business. The concept obile phone games are typically Mobile handsets are one of many distribution Mis familiar to most businesses: small charges Korea, one of the largest markets for casual Mdownloaded from the mobile are a very effective way to generate money from “deck” or are pre-installed on mobile platforms for casual games consumers. It is what makes McDonald’s “Super games with microtransactions, has a nearly phones. Consumers may purchase Size Me” so effective: consumers are more likely 75% internet broadband penetration rate 2 with downloaded games based either on a difficult for many consumers. However number of smaller developers able to to add just a little bit more—than to purchase two one-time fee, a monthly subscription, it is this small form factor which many compete in the market. items. 46 mbps average internet broadband speed. or as a pay for play arrangement. consumers find appealing—because As demonstrated with the strong launch Consumers download or purchase at retail a game it allows them to play games without 1.5 mbps is considered broadband in the USA The potential for mobile distribution is of Bejeweled, Jewel Quest and more which features the option for them to purchase bothering others around them. Like high as penetration of mobile phones recently Diner Dash, the mobile market gameplay items for a small (micro) amount of money (payments/ more or less casual depending on their desired when the family is watching television is also high—nearly every consumer has emerged as an important revenue transactions). Consumers have the opportunity to purchase items play style. or right before falling asleep in bed. in many parts of Asia, Europe and source for casual game developers and inside of the game, which enables them to increase the pleasure of Since the game is typically given away for free, piracy North America have mobile phones. The mobile industry has been shaking publishers. the game experience. is not an issue. In the Western markets, online Additionally, consumers in developing off a bad name recently, early mobile Mobile platforms have the possibility In-game items for purchase may serve both decorative and functional music and ringtones have made many consumers countries will acquire a mobile phone game offerings were often marketed to enjoy strong growth as consumers purposes. Common items available for purchase include power-ups, familiar with the idea of micropayments—and before more expensive gaming poorly with consumers purchasing rediscover mobile games; this can more powerful game-play objects and adornments for characters. with strong investment into casual MMO’s in 2007, platforms or personal computers. games based solely on a cryptic be observed through the excellent Consumers typically accumulate virtual currency in two ways: Virtual we expect to see a maturation of the market in description—without the benefit of Mobile phones are well suited to customer satisfaction that high quality currency can be “earned” based on time and/or performance within Western markets in 2008 and 2009. a free trial demo. Post dot-com crash delivering casual games to consumers casual games enjoy on mobile platforms the game, or it can be “purchased” using real money. at moments—while on the train or in a speculation coupled with inconsistent and the influx of consumer behavior The lion’s share of the revenue for Asian publishers waiting room, for example—when they merchandising of the carrier decks information that the casual industry Players who do not have large amounts of time to “invest” in a game is through microtransactions. According to Pearl 1 are likely to have time and be open to caused consolidation and limited the brings to game merchandising. may advance more quickly by purchasing skill rather than earning it. Research , ten publishers in Asia playing games. As a result, such players will stay engaged in the game longer than crossed the $100 million revenue mark in 2006, a Card, puzzle, and board casual games represent they would otherwise. In a way, this allows consumers to make a game huge milestone for the industry. While mobile phones are suited to delivering content easily—they are nearly half of the Top 10 games on mobile phones but Microtransaction Offering Primary Markets These companies include: often not ideal for playing games—the only 28% of the games offered on operators’ decks1 China: Shanda, Netease, The9 small screen and small buttons can be Maplestory, Nexon Korea, USA Korea: Nexon, NC Soft, CJ Internet, NHN, Neowiz Kart Rider, Nexon Korea, China Taiwan: Soft-World, Gamania Global Market Share1 Worldwide Mobile Transaction Types1 Hangame, NHN Korea, Japan, North America Microtransactions were originally launched as a n n n n n n n n n n n n n n n n n n n n Profitable publishers way to avoid rampant piracy in Asia and Russia. n n n n n n n n n n n Japan n n n n n n n n n n n Download Diner Dash, PlayFirst North America, Western Europe n n n n n n n n n n n n n n n n n n n n have eight times the While the Asian market has benefited from high n n n n n n n n n n n South Korea n n n n n n n n n n n Subscription QQ Games, Tencent China broadband penetration rates, the Russian market n n n n n n n n n n n n n n n n n n n n original IP in their has been slower to develop, but has the same n n n n n n n n n n n Western Europe n n n n n n n n n n Ourgames China n n n n n n n n n n n n n n n n n n n n n Pay-per-Play dominance in the online market. While Eastern n portfolio as un-prof- n n n n n n n n n n Eastern Europe n n n n n n n n n n IT Territory Russia Europe and Russian online downloadable casual n n n n n n n n n n n n n n n n n n n n games generate $10 million in yearly revenue, the n North America itable publishers n n n n n n n n n n n n n n n n n n n n ClubPogo, Electronic Arts North America, Western Europe online microtransaction market generates over $24 million mainly from IT Territory’s offerings. 3 Typical Operator & Publisher Revenue Split1 Japan USA Europe More Information 1. Paul Heydon, “What is the Holy Grail in Online Games?”, Casual Connect Magazine, Summer 2007, p26, http://mag. n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n Japanese Operator n n n n n n n n n n n USA Operator n n n n n n n n n n n European Operator casualconnect.org/. n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n (DoCoMo, KDDI) n n n n n n n n n n (AT&T, Sprint, Verizon) n n n n n n n n n n (Vodafone, Orange) 2. Erik Bethke, “Path from Online Game to a World”, Casual Connect Seattle 2007, http://podcasts.casualconnect.org/. n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n 3. Whon Namkong, “Will free-to-play, item-buy games find a hold here in the US casual games market?”, Casual Connect n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n Japanese Publisher n n n n n n n n n n n USA Publisher n n n n n n n n n n n European Publisher Seattle 2007, http://podcasts.casualconnect.org/. n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n 4. “Try and Buy Isn’t Dead”, Casual Connect Seattle 2007, http://podcasts.casualconnect.org/. source: Screen Digest 1. For more information on the Asian microtransaction market or to ask permission to use the data or to purchase a full report, pleased contact Pearl Research at [email protected] or call 415-738-7660. 1. For more information on mobile games, to ask permission to use the data or to purchase a full report on Mobile Games, contact Piers Harding-Rolls at 2. According to the Korea Ministry of Information and Communications as of June 2007, provided by Pearl Research. Screen Digest http://www.screendigest.com/, +44 (0)20 7424 2820. 3. From data reported directly to the Casual Games Association by major portals in Eastern Europe & Russia. Casual Games Market Report 2007 35 Casual Games Market Report 2007 36 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Business of Casual Business of Casual Business Model: Retail Boxes Business Model: In-Game Advertising & Advergaming

he casual retail consumer experience is Because consumers cannot try a game before buying and retail- n-game advertising: Consumers play games which dvergames are typically free or nearly free for the Tsimilar to the stereotypical game purchasing ers typically do not offer ratings of each product alongside boxes, Ipause periodically (between levels, for example) to run Aconsumer—the brand owner pays for the majority of experience where consumers view a large display consumer satisfaction is difficult to gauge and the most enjoyable advertisements—much in the same way that advertising runs the development and distribution of the game title. If the at a brick-and-mortar retail store such as Wal- between segments of a network television show. products are not always the best selling products product is designed properly, the game and brand are well Mart, Target or Best Buy. Often in-game advertising offers a high-CPM advertising integrated and related, providing high-engagement exposure for the brand. Partnerships between brands and developers Single titles typically sell for $5 to $35 and are Keep in mind though that the lower development costs for casual experience in the form of exclusive screen-time movies— can be quite symbiotic: The developer gets funding and offered for PC platform, Mac, DS, Wii, PSP, PS2, games also come with lower price points than their hard-core because of the high CPM, consumers are then able to enjoy a well-known brand name for its product, and the brand PS3, Xbox. Sometimes aging titles or those with counterparts, while maintaining many of the same costs associated longer trial periods for premium products and in some gets exposure to consumers through an unconventional lower production values are aggregated and with retail. In fact, many casual companies have chosen to focus arrangements, the premium products are entirely free. medium. offered together as collections. solely on online distribution due to of the high costs associated Distributors typically rely on data from online with retail. Which also be paid in advance, before any revenue has Advergaming is a tricky business for both the developer and retailers to direct their merchandising decisions actually been realized. Ads are the brand owner as advergames can be expensive to create for PC casual games. Since online data is often displayed at and market and the general effectiveness at building brand indicative of consumer satisfaction of a title, such awareness is largely unproven—there is not a lot of evidence 1 natural breaks Typical Expenditures Associated With Retail Distribution that typical advergames have a significant impact on product data determine both which products to offer and during game how much shelf-space to allocate to each title. Retail Price $19.99 sales. play, much Retail games with broad appeal include card and Add: Retailer’s Cut 30% ’s “” - A Success Story1 board games as well as titles you can also download Add: Box | Disc $ 3 like television The most well known and successful to date from a casual games portal (such as Diner Dash, Add: Fulfillment $ 3 commercials Bejeweled or Solitaire). might be Burger King’s “Sneak King.” Add: Marketing $ 2 In November, 2006, Burger King released branded video Developers report an additional 10% in Do the math: $8.00 + $19.99 x 30% games for Xbox/Xbox 360. By the end of December 2006, revenue from offering their trial-to-purchase Consumers have reacted very positively to initial offerings of in-game advertising for casual games. Additionally, gamers Burger King announced a 41 percent increase in its second- games to brick-and-mortar retailers To Content Creators $ 6.00 report high recall compared to the in-game product- quarter fiscal year net income, which was attributed to placement advertising favored by core game publishers. the immense popularity of its cheap, branded Xbox 360 Although some potential customers never venture (In contrast, numerous studies indicate that core gamers’ games—which sold well over 3.2 million copies. Net Income down the game aisle, it is very easy for consumers 2 2007 Install Base recall and recognition of in-game ads—which typically leapt from $27 million to $38 million. to process a large amount of games and categories n Sony Playstation 2 (112.6M) n Nintendo DS (60.5M) n Sony PSP (29.8M) appear on posters and billboards within the core games— of games for those that do. Hundreds of games are surprisingly low.) are easily displayed on a shelf, whereas an online storefront might only show at most a couple dozen “Advertising when done right, is changing the options on-screen at a time. revenue model for developers. In-game, video stream- ing ads placed in natural breaks to the games are increasing some developers revenue- per-game-played More Information threefold, and game players are embracing the ads because they are getting unlimited free play on our 1. Mark Cottam, Miguel Oliveira, “Merchandis- 2 ^ Burger King released three insanely popular advergames ing at Retail”, Casual Connect Magazine, Summer n Nintendo Wii (17.1M) network.” Rob Glaser, CEO, RealNetworks in November 2006. The Sneak King targeted 18 - 35 year 2007, pg 32, http://mag.casualconnect.org/. n Sony Playstation 3 (7.7M) n Microsoft Xbox 360 (13.9M) olds was invented to help revive the BK brand. For more 2. Erik Goossens, “Games Selection, What’s The information visit: Right Balance?”, Casual Connect Magazine, Sum- ^ By the end of 2007, Screendigest estimates there will be a total of 241.6 http://www.bkgamer.com/SneakKing.aspx, click “trailer”. mer 2007, pg 13, http://mag.casualconnect. million consoles sold which are actively supported by manufactures. More Information Screendigest estimates there are 60 million households with video game org/. 1. “Beyond Downloads”, Casual Connect Magazine, Winter 2007, pg 20, http://mag.casualconnect.org/. consoles. 2. Mark Cottam, Paul Jensen, “Monetization Across 2. Rob Glaser, “CGA Seattle 2006 Keynote”, Casual Games Association’s Conference June 2006. the Value Chain”, Casual Connect Magazine, Winter 2007, pg 12, 3. Jamie Monberg, “Putting the Brand into Interactive”, Casual Connect Seattle 2007, http://podcasts.casualconnect.org/. http://mag.casualconnect.org/. 4. Kate Connally, Kyra Reppen, Kenny Rosenblatt, Sion Lenton, “Teens & Tweens”, Casual Connect Seattle 2007, http://pod- 3. Scott Steinberg, “Wii For Victory”, Casual Connect Magazine, Winter 2007, pg 23, http://mag.casualconnect.org/. casts.casualconnect.org/. 5. Brian Robbins, “Casual Games are not Just Downloads”, Casual Connect Seattle 2007, http://podcasts.casualconnect.org/ 1. From data reported directly to the CGA by a retail publisher. Data considered reliable for illustrative purposes, but may not be accurate in all cases for 6. Search for Sneak King, Eat Like A Snake and Subservient Chicken on YouTube, it won’t disappoint. all distributors, retailers or platforms. 1. Sneak King facts are from corporate Burger King press releases. Casual Games Market Report 2007 37 Casual Games Market Report 2007 38 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See section page for full copyright, trademark and important disclosure information. This section includes profiles of companies who participated in the Casual Games Market Report 2007 using information supplied to the CGA during data collection. Information and images included in profiles are the property of their respective owners. This section includes profiles of companies who participated in the Casual Games Market Report 2007 using information supplied to the CGA during data collection. Information and images included in profiles are the property of their respective owners. Developer | Publisher | Distributor | Portal Developer | Publisher | Distributor | Portal BigBig FishFish Games,Games Inc Electronic Arts Casual Entertainment

1501 4th Ave http://www.bigfishgames.com/ http://www.pogo.com/ 209 Redwood Shores Parkway Seattle, WA 98101 [email protected] http://www.eamobile.com/ Redwood City, CA 94065 company company key employees

Founded: 1 March 2002 Paul Thelen Key Dates: 1982 Electronic Arts founded 2 Sept 1999 Pogo.com launched from T.E. Network Employees: 200 up 68% from 119 in 2006 March 2000 JAMDAT founded by Lahman, Norman, Murray, Lasky 5 June 2007 EA Casual Entertainment division formed Acquisitions: 6 January 2006 FunPause EURL, French casual game developer Acquisitions: 28 February 2001 Pogo.com for $50 million (approx) 14 February 2006 JAMDAT for $680 million Funding: 1 March 2002 $10,000, Paul Thelen Paul Thelen 2005 $ 3.7 million, angel investment Founder & Chairman Employees: 140 Pogo, 400 EA Mobile Kathy Vrabeck Andrew Pedersen 2 December 2005 $ 5 million, angel investment President, EA Casual Vice President, Pogo Nasdaq: ERTS content content

Big Fish Games is known for progressive publishing and distribution agreements with developers, with a focus Content Developer | Online, Download on mentorship and open knowledge exchange about preferences of consumers and distribution portals, helping Over 20 games per year are developed internally for online web and download distributed in retail, on pogo.com developers create high quality products. Stable and close partnerships with casual games websites allow Big Fish and other major online portals. Pogo games are also popular on Xbox Live Arcade and Nintendo DS platforms. Games to distribute casual game content to most of the large game distribution portals on the Internet. Xbox Live Arcade games: Boom Boom Rocket and Wing Commander Arena Content Developer | Mystery Case Files Mystery Case Files Nintendo DS/Wii games: Pogo Island, a compilation of five popular pogo.com games from BFG Studios Pogo web/download games: The Poppit! Show, Word Whomp, Fairy Godmother Tycoon Poppit!, an evergreen Mystery Case Files took 2006 by storm, defining a new genre of games inside of the casual games space. brand from Pogo.com Five sequels and extensions of the core game play mechanic have launched in 2006 and 2007 including Content Developer | Mobile Hidden Expedition and Travelogue 360. EA Mobile is the #1 publisher with a wide selection of sports, simulation, racing and puzzle games. Content Publisher | Virtual Villagers, Fish Tycoon Notable Mobile Games/Series: Bejeweled, Tetris, The Sims, Harry Potter, EA SPORTS Franchises Virtual Villagers and Fish Tycoon were developed by Last Day of Work, an independent California de- Content Developer | Licenses veloper, and published by Big Fish Games. Virtual Villagers and Fish Tycoon were genre defining casual Electronic Arts has a long history of successfully creating licensed products from top brands including a myriad games which topped the charts in 2006 and 2007. of sports licenses under the EA SPORTS brand and Hasbro titles under the EA Casual Division.

Virtual Villagers EA SPORTS PGA TOUR GOLF distribution from Last Day of Work distribution

Online Distributor | www.bigfishgames.com, My Game Space & Principal Network Partners Online Distributor | www.pogo.com, www.clubpogo.com Big Fish Games uses extensive online marketing campaigns to attract users to play web based free online games monetized by advertising Users are attracted to pogo.com via free online games with about 5% of users joining Club Pogo for $5.99/month, $34.99/year for online and 60 minute trial to purchase downloadable games which are sold individually for $19.99 or in groups of 6 for $47.94 and 12 for $83.88. play free of advertisements with community features including Minis (avatars), Gems (virtual currency), Badges (achievement boards) and chat rooms. Users may also purchase individual games via the Pogo To Go service for $19.99. Pogo.com has a loyal and proud user www.bigfishgames.com has existing partnerships with 400 developers, a catalogue of more than 1,000 games and releases over 350 games base forming a strong community and referral network - more than 50% of all users have recommended at least 3 people to the service. a year to 25 million unique users. The majority of revenue from www.bigfishgames.com is through content purchased by consumers which has high per-user revenue which has resulted in www.bigfishgames.com becoming one of the most popular websites for initial exclusive Unique Users 15.8 million unique users per month distribution arrangements. Play Time Pogo.com users average 7 hours per week online, Club Pogo users average 12 hours per week online Club Pogo Subscribers 1.5 million subscribers, up 200% from July 2004. 90% of Club Pogo trials result in a full subscription Unique Users 25 million unique users per month Virtual Currency 100 million Club Pogo Gems purchased within 8 months of launch Downloads over 750,000 downloads each day, up 150% from 2006 Paying Customers 75% Female, 77% over 35 years old Playing Consumers 58% Female, 56% over 35 years old our take our take

Big Fish Games has consistently delivered innovative creative products and expertly executed business and distribution offerings which has Two major developments this year have put EA in the spotlight: the official creation of EA Casual Entertainment which includes Pogo and afforded them explosive organic growth with minimal outside funding. In June 2006, Jeremy Lewis was hired as President and COO (ap- EA Mobile headed by Kathy Vrabeck and the licensing of the Hasbro brand which has yet to see its full potential with electronic rendi- pointed to CEO in October of 2007) signifying an era of acceptance of casual games by the mainstream financial industry. tions. Given the great success of Pogo connecting with the casual consumer, we have high hopes for EA Casual Entertainment. more information more information

Paul Thelen, “Don’t Let The Competition Eat You For Lunch”, Casual Connect Seattle 2007. http://podcasts.casualconnect.org/. Andrew Pedersen, “Portal Strategy”, Casual Connect Seattle 2007. http://podcasts.casualconnect.org/. Paul Thelen, “Bringing Your Games To Market”, Casual Connect Magazine, Winter 2007, pg 7. http://mag.casualconnect.org/. Andrew Pedersen, “PSP, DS, Wii, XBLA, Retail?”, Casual Connect Seattle 2007. http://podcasts.casualconnect.org/. Paul Thelen & Mark Robben, “Surving a Hit Driven Market”, Casual Connect Magazine, Fall 2007. http://mag.casualconnect.org/. Joel Brodie, “Interview with Beatrice Spaine”, Casual Connect Seattle 2007. http://www.gamezebo.com/2007/cga_report.html/. Joel Brodie, “Interview with Paul Thelen”. http://www.gamezebo.com/2007/cga_report.html/. EA Appoints Kathy Vrabeck as Head of EA Casual Entertainment. http://www.info.ea.com/news/pr/pr880.pdf. Joel Brodie, “Interview with Paul Thelen”, Casual Connect Seattle 2007. http://www.gamezebo.com/2007/cga_report.html/. EA’s Club Pogo has sold over 100 million Virtual Gems. http://www.info.ea.com/news/pr/pr1002.pdf. 60 minute trials of BFG games available online: http://www.bigfishgames.com/. Online versions and 60 minute trials of Pogo’s games can be found on their website: http://www.pogo.com/. Casual Games Market Report 2007 39 Casual Games Market Report 2007 40 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. This section includes profiles of companies who participated in the Casual Games Market Report 2007 using information supplied to the CGA during data collection. Information and images included in profiles are the property of their respective owners. This section includes profiles of companies who participated in the Casual Games Market Report 2007 using information supplied to the CGA during data collection. Information and images included in profiles are the property of their respective owners. Developer | Portal Developer | Publisher | Distributor | Portal | Platform King.com Microsoft Casual Games Microsoft Corporation 62 Shaftesbury Avenue http://www.king.com/ http://microsoftcasualgames.com/ One Microsoft Way London W1D6LT, UK [email protected] [email protected] Redmond, WA 98052 company founders company key platforms Founded: August 2003 Riccardo Zacconi, Toby Rowland Key Dates: 1975 and found Microsoft 1985 Games bundled with Microsoft Windows Employees: 60 UK, Germany, and Los Angeles 1990 Solitaire bundled with Windows 3.0 1995 Zone.com founded by Binkley and Im Funding/Exit: September 2005 $43 million (34€), Apax Partners & Index Ventures 1996 Microsoft Acquires Zone.com (now MSN Games) undisclosed, Klaus Hommels 2001 Zone.com launches Diamond Mine (Bejeweled) download 2004 Xbox LIVE Arcade Launches Revenue: 2006 $27.7 million, profitable Riccardo Zacconi, co- Toby Rowland, co- Nasdaq: MSFT Founder & Director Founder & Director content content

King.com’s content follows three broad categories: custom themed games with broad demographic appeal, li- Content Developer | Content Publisher censed pop properties and popular casual games. Because of security and customization requirements, games are Microsoft has a large and active casual games publishing department across their platforms including MSN Games, Messenger, developed by their studios in Stockholm, Sweden and Hamburg, Germany, King.com does not publish content. Xbox LIVE Arcade and Games for Windows. Historically at Microsoft, internal game development has proven generally unsuccessful, but recently internally developed UNO sold more than 600K copies on Xbox LIVE Arcade and is also available for Web and Windows LIVE Content Developer | Custom Games Messenger. Games with accessible themes such as goldfish, polar bears and gems integrated with simple and addic- tive gameplay representing 80% of available games are the cornerstone of the playing experience. Content | Windows Operating System Games Deal Or No Deal Easily the largest step in bringing electronic casual games to consumers is when Microsoft bundled games with their operating system in Content Publisher | Licensed Properties 1985. Solitaire is the #1 opened application on the Windows XP operating system, which has more than 400 million copies in use. While fewer, licensed properties compose a large percentage of the play time on King.com including pop 1990 - DOS: Gorilla.bas and Nibbles.bas developed by Rick Raddatz (similar to Atari’s 1977 Surround designed by Alan Miller) licenses from NBC, Endemol, FremantleMedia: Black Widow Jeanette Lee, The Quiz Queen, American 1990 - Windows 3.0: Solitaire developed by Wes Cherry and , Minesweeper, and Hearts Idol, Deal or No Deal, and 1 vs 100. Pop licenses with demographics similar to the paying audience have 2006 - : In addition to Solitaire, Minesweeper and Hearts, four games are added including Chess and Mahjong proven very successful not only in continued interest from players, but from the initial boost in exposure when games are highlighted during primetime. distribution Black Widow Jeanette Lee distribution Online Distributor | MSN Games, games..com Online Distributor | www.king.com One of the largest online retailers for casual games with more than 14 million unique users per month, MSN Games offers over 600 free King.com offers online games where users join a competition of skill submitting a small amount of money - the player who performs the casual single player and multiplayer games, downloadable games and premium multiplayer games with badges, forums and matchmaking. best during the competition is awarded the pot minus a small administrative fee. Entry fees typically range from $.50 to $2.00 per game User demographics: 70% female, 56% over the age of 35. played. King.com’s distribution network includes King.com and white label solutions for Yahoo!, Real Networks, Microsoft and Orange. Online Distributor | , games.msn.com/messenger Play Time 8 million hours of play a month Over 13 million unique users play two dozen high quality multiplayer casual games which are integrated directly into messaging client. Games Played 80 million a month User demographics: 60% female, 10% over the age of 35, 20% inside USA. Revenue: Advertising 100% Reach 9 languages, 7 currencies Customer Demographics 60% Female, 85% over 25 years old Online Distributor | Xbox LIVE Arcade, xbox.com/livearcade While we have had an inkling that “hard-core gamers” were playing casual games online (and not purchasing them) - Xbox LIVE Arcade King.com does not offer money tournaments in the states of Alaska, Arizona, Connecticut, Delaware, Florida, Illinois, Iowa, Louisiana, Maryland, Missouri, verified hard-core gamers do play casual games. With no freebie play and short trial periods, conversion rates average at approximately 18% Montana, South Carolina, South Dakota, Tennessee, or Vermont. - product is flying off the virtual shelves. Xbox LIVE has more than 10 million paying users. future our take our take

King.com has a slick interface, great community features and a solid handle on the casual games demographic. Microsoft Casual Games reaches more than 125 million users each month and has been responsible for more major milestone develop- ments in the casual games space than any other single company. 27 years of bringing casual games to millions of consumers along with an impressive holding of casual games properties puts Microsoft squarely in line to continue their success.

more information

Andy Peterson ,”Services Drive Gaming’s Future”, Casual Connect Magazine, Summer 2007, pg 8. http://mag.casualconnect.org/. Scott Austin, “State of Advertising 2007”, Casual Connect Seattle 2007. http://podcasts.casualconnect.org/. Marc Whitten, “Future of Casual Games”, Casual Connect Seattle 2007. http://podcasts.casualconnect.org/. Chris Early & Scott Austin, “Beyond Downloads”, Casual Connect Magazine, Winter 2007, pg 20. http://mag.casualconnect.org/. Joel Brodie, “Interview with Joshua Howard, Carbonated Games”. http://www.gamezebo.com/2007/cga_report.html. Ethan Clark, “Developing For Xbox LIVE Arcade”, Casual Connect Magazine, Summer 2006, pg 12. http://mag.casualconnect.org/. Casual Games Market Report 2007 41 Casual Games Market Report 2007 42 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. This section includes profiles of companies who participated in the Casual Games Market Report 2007 using information supplied to the CGA during data collection. Information and images included in profiles are the property of their respective owners. This section includes profiles of companies who participated in the Casual Games Market Report 2007 using information supplied to the CGA during data collection. Information and images included in profiles are the property of their respective owners. Developer | Publisher | Portal Developer | Publisher | Distributor Nickelodeon Kids and Family Group, MTV Networks MumboJumbo

1515 Broadway http://www.nick.com/ http://www.shockwave.com/ TM http://www.mumbojumbo.com/ 2019 N Lamar St Ste 300 New York, NY 10036 http://www.Neopets.com/ http://www.addictinggames.com/ [email protected] Dallas, Texas 75202 http://www.nickjr.com/ http://www.noggin.com/ http://www.the-n.com/ company founders company statistics Founded: 2001 Mark Cottam and Ron Dimant AddictingGames Key Dates: 15 Nov 1999 Neopets.com website launched 20 million unique users per month Employees: 90 15 Jan 2001 AtomFilms and Shockwave.com merge 70% under 18 years old 1 July 2005 Nick Arcade relaunched Acquisitions: January 2006 Zono, Los Angeles, California 20 Jun 2005 Neopets, Inc acquired for $160 million Neopets 24 January 2007 Ritual Entertainment, Dallas, Texas 2 Nov 2005 AtomShockwave acquired AddictingGames 10 million unique users per month 31 July 2007 Hot Lava, Vladivostok, Russia 5 Jan 2006 Nick.com’s launch of New Game of the Week Franchise 80% under 18 years old 9 Aug 2006 Atom Entertainment, Inc acquired for $200 million Nick.com Mark Cottam Ron Dimant 30 Jan 2007 Nicktropolis launched 14.8 million unique users per month co-Founder & President co-Founder & CEO 342 million games played per month content Nasdaq: VIAB (Viacom Inc) Shockwave 55.7 million registered users Content Developer | LUXOR 42% Female, 41% over 35 years old LUXOR franchise with community | products The LUXOR Franchise is one of the better followups to (aka Ballistic, an action- over 50 million downloads popular in 1998-1999). The key mechanic of match-three game play has proven to be one of the most popular gameplay mechanics in the resurrection of casual Online Distributor| Nick.com Online Community | AddictingGames.com games on the PC. The LUXOR series was the best selling casual game of 2005 on most Nick.com, Nickelodeon’s online destination for kids, features over With an average of over 10 million monthly visitors and over 2600 online portals with over 50 million downloads. 300 free web games starring characters from kids’ favorite Nick shows. games published from over 1000 game developers, AddictingGames The site’s New Game of the week franchise adds to that offering with is the largest source of the best free online games on the Web where Content Publisher a new game release every week. Nickelodeon also offers premium fans can play, share and even submit their own game creations. Because of the founder’s background in the core gaming market, MumboJumbo has downloadable games for kids at NickArcade.com. Online Distributor | Shockwave.com resources to publish casual games across multiple platforms including PC, Mac, Xbox 360, Online Distributor | NickJr.com Shockwave.com is a leading destination for online and downloadable PSP (PlayStationPortable), PlayStation 2 & PlayStation 3, Windows LIVE Messenger, PDAs, NickJr.com is the online place where parents introduce preschool games, serving a large, loyal audience since 1998. Reaching an cell phones, Xbox LIVE Arcade, the Nintendo DS and Nintendo Wii. kids to the web and tap into the power of Nick Jr.’s characters. NickJr. average of 20 million people each month, Shockwave has a library com’s Playtime features more games than any other preschool site of more than 400 games, with new games added weekly. MumboJumbo is also an online publisher of premium casual games, maintaining strong as well as the first broadband video player for preschoolers. Nick Online Community | Neopets.com relationships with some of the top online gaming sites in the world including MSN Games, Jr. also offers premium downloadable games at NickJrArcade.com. On Neopets, players create a Neopet as their companion that they Yahoo! Games and RealArcade. ^ LUXOR for the PSP Online Distributor | NOGGIN.com can dress and care for while exploring the world of Neopia, rich with < Charlotte’s Web, in part- NOGGIN.com offers free educational games for preschoolers 54 species, 16 lands and numerous characters, stories and plotlines. nership with Nickelodeon, starring characters from NOGGIN’s original programming as well Neopets boasts more than 40 million global memberships, 200 one of the first casual popular Nick Jr. shows. New from the creators of Nick Jr. and games, a virtual economy based on Neopoints, creativity contests, distribution games with a television NOGGIN is myNOGGIN.com, a premium ad-free, educational and the Neovision video player. Neopets is available in 11 languages, marketing campaign online subscription service designed for preschoolers through first for the 12 million monthly unique visitors globally and logs over 300 Retail Distributor graders. million monthly game plays. MumboJumbo played a pivotal role in re-opening the retail market for casual games developed in North America and Western Europe. In Online Distributor | The-N.com Online Community | Nicktropolis.com early 2000, retail shelf space for “hard-core” PC games was shrinking - and through the efforts of MumboJumbo much of this shelf space was The Emmy-award-winning The-N.com is the first network web site Nicktropolis is a kid-targeted multi-media experience that offers set aside for casual games. MumboJumbo always used content they knew would appeal to the consumer by taking titles that had performed to provide teens the ability to create mash-ups, watch, comment on visitors the opportunity to engage in a virtual world filled with their well on online retailers. and share content from their favorite shows with all of their friends favorite web-based activities. At Nicktropolis kids have their own MumboJumbo successfully reserved shelf space for casual games by directly partnering with leading mass merchants, computer retailers and anywhere, anytime of day. The-N.com focuses on social games for virtual community where they will have the opportunity to play specialty outlets such as Best Buy, GameStop™, SAM’S CLUB, Target and Wal-mart. teen girls. In 2008, The-N.com will partner with AddictingGames games, watch video, explore Nickelodeon-branded and original to produce The-NGames.com, the first major casual gaming site to environments, interact with other kids or Nickelodeon characters in focus solely on teen girls. real time, and create their own personalized 3D rooms. our take our take North American and European content creators and publishers owe MumboJumbo for paving the way with retail in the United States and Europe. Because MumboJumbo was good about pushing high quality content, retailers have become open to casual games content on their Nickelodeon Kids and Family Group has an expansive footprint in gaming through a diverse portfolio of online casual gaming, console- shelves. Now that other players have entered the retail market, it is unknown if MumboJumbo’s large market share will continue. based and handheld games. The company’s portfolio of online casual gaming properties, which generate almost 1 billion game plays per month from audiences ranging from kids to adults, include Neopets, Nick.com, Nickjr.com, Shockwave, Nick Arcade, AddictingGames and many more. more information more information Mark Cottam, MC for all sessions: July 17 Taper Aud, July 18 Recital Hall, Casual Connect Seattle 2007. http://podcasts.casualconnect.org/. Peter Glover, “Beyond Downloads”, Casual Connect Magazine, Winter 2007, pg 20. http://mag.casualconnect.org/. Mark Cottam, “Merchandizing at Retail”, Casual Connect Magazine, Summer 2007, pg 32. http://mag.casualconnect.org/. David Williams , “Portal Strategy, , Casual Connect Seattle 2007. http://podcasts.casualconnect.org/. Ethan Clark, “Monetization Across the Value Chain, an Interview with Mark Cottam”, Casual Connect Magazine, Winter 2007, pg 12. Steve Youngwood, “Big Media & Casual Games”, Casual Connect Seattle 2007. http://podcasts.casualconnect.org/. http://mag.casualconnect.org/. Kate Connally, Kyra Reppen, “Teens & Tweens”, Casual Connect Seattle 2007. http://podcasts.casualconnect.org/. Shaul Olmert, “Try & Buy Isn’t Dead”, Casual Connect Seattle 2007. http://podcasts.casualconnect.org/. Casual Games Market Report 2007 43 Casual Games Market Report 2007 44 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. This section includes profiles of companies who participated in the Casual Games Market Report 2007 using information supplied to the CGA during data collection. Information and images included in profiles are the property of their respective owners. This section includes profiles of companies who participated in the Casual Games Market Report 2007 using information supplied to the CGA during data collection. Information and images included in profiles are the property of their respective owners. Developer | Publisher | Distributor | Portal Developer | Publisher | Distributor | Portal Oberon Media RealNetworks

One Penn Plaza, Suite 4100 http://www.oberon-media.com/ http://www.realnetworks.com/ 2601 Elliott Avenue New York, NY 10119 [email protected] [email protected] Seattle, WA 98121 company company key employees

Founded: 2003 Oberon Media founded by Tal Kerret, Tomer Ben-Kiki, Ofer Leidner, and Jane Jensen Founded: 1999 Rob Glaser Acquisitions: 15 Jan 2001 Cmate SA, mobile game developer and technology Employees: 300 in games over 2,000 total staff at Real 21 Nov 2006 Blaze Mobile, mobile game developer and technology 17 July 2007 PixelPlay, Interactive TV developer and distributor Acquisitions: January 2004 $35.6 million GameHouse: Developer & publisher 31 May 2007 I-play, mobile game publisher May 11, 2005 $15 million Mr.Goodliving: Mobile distributor & developer 17 Oct 2007 Kenjitsu, casual game development studio, St Petersburg February 2006 $21 million Zylom: European distributor & developer November 2006 Atrativa: Latin America distributor 17 Oct 2007 Friends Games, casual game developer, Rivne, Ukraine ^ Garrett Link accepting ^ Erik Goossens & Rutger Funding/Exit: June 2006 & 2007 Goldman Sachs, Morgan Stanley, Oak Investment and many other high profile investors September 2007 GameTrust: Community services Award for Super Collapse III Peters co-founders of Zylom Nasdaq: RNWK Rob Glaser announces Daniel Prigg and Jeremy Employees: 500+ advertising revenue sharing Snook in Kyiv, Ukraine content content Content Developer When Real acquired GameHouse in 2004, GameHouse was a leading content developer - two Content Publisher | Magic Match, Xbox LIVE Arcade, Saints and Sinners Bingo and MS Vista Games years later Real acquired Zylom which in addition to distribution and localization services also Oberon Games published of 19 of the 27 original titles for Xbox LIVE Arcade launched in 2004 including Bejeweled, Zuma, Feeding created first and second party content. These two acquisitions have enabled Real to own a steady Frenzy, Super Collapse II, Marble Blast and Ricochet Lost Worlds. Following the success of the Xbox Live Arcade titles, Microsoft contracted stream of casual game content for distribution on their websites and via distribution partners. Oberon to create the bundled games for Windows Vista adding Chess and Mahjong. High Profile IP: Hasbro and Mattel licence their properties for casual game development The Oberon Games Publishing group quickly followed the launch of the Xbox Live Arcade titles with the strong selling titles Saints and overseen by Real including Scrabble, Monopoly, UNO. Sinners Bingo (March 2005), developed by Large Animal Games and Magic Match (December 2005) developed by Codeminion. First Party: GameHouse and Zylom have directly created content such as Super Collapse!, Little Shop of Treasures, Delicious Deluxe, TextTwist and Puzzle Inlay. Content Developer | Inspector Parker, Dream Day Wedding, Agatha Christie: Death on the Nile Inspector Parker (October 2004) and BeTrapped! (March 2005) were Oberon’s first game releases. Designed by Jane Jensen both games Content Publisher Revenue & Yearly Growth proved great successes. Jane’s more recent projects include Agatha Christie: Death on the Nile (April 2007) a seek and find game based on Real has an active game publishing department with general strong results the classic Agatha Christie novel. The Dream Day Wedding Series (February 2007) designed by Cara Ely also proved a huge hit with 30 million including games: Tropix, Sally’s Salon, Burger Rush, Mysteryville & Mortimer downloads for the hidden object games Dream Day Wedding and Dream Day Honeymoon. Becket and the Secrets of Spooky Manor. $100 53% million $86.2 Content Publisher | Mobile $80 I-play publishes games for mobile phones and works with a broad range of content partners and sales channels. Mobile content includes distribution million 63% The Fast and The Furious and iWin Games’ Jewel Quest and Mahjong Quest. I-play also works with top media and entertainment brands, $60 $56.3 Including Twentieth Century Fox, Universal Pictures, World Rally Championship, Warner Bros., and BBC Worldwide, as well as leading Online Distributor | realarcade.com, .com, zylom.com, atrativa.com million 281% publishers of both console and online games. Online Distribution Partners | AOL, MSN, Lifetime $40 In May 2001 Real launched RealArcade, software installed on users machines million $34.3 $20 56% enabling them to download game content. Most games are less than 25MB 86% and the users are given a variety of ways to play: free 60 minute trials before million $12.2 distribution $4.2 $7.8 purchase for $19.95 or $9.99 with subscription, in-game rich media ads appear 2001 2002 2003 2004 2005 2006 Online Distributor | In-Browser & Download White Label in some games during gameplay or playing of limited versions with banner ads. source: RealNetworks global, integrated casual-games solutions across online, mobile and interactive TV platforms, following its recent acquisitions of I-play and Unique Users 40 million unique users per month, 750,000 downloads each day PixelPlay, respective leaders in the mobile games and iTV casual games markets. Oberon provides white label turn-key casual game solutions Paying Customers 75% Female, 67% over 35 years old through the Oberon Game Center platform which has been adopted by some of the world’s largest corporations including Microsoft, Playing Consumers 53% Female, 71% over 35 years old Comcast, Verizon, Electronic Arts, MySpace, France Telecom and NHN. The platform combines casual-game content, merchandising and features to fulfill each partner’s specific needs. This includes advertising-sponsored online, multi-player games, and community-driven game experiences as well as traditional downloadable casual game offerings. Multilingual solutions are available in English, German, our take French, Italian, Spanish, Dutch, Danish, Swedish, Japanese, Chinese (Traditional & Simplified), and Korean. RealArcade was the largest online retailer of casual games at the time of the strategic purchases of GameHouse and Zylom - this has enabled Real to control significant properties in both content development and distribution in North America and Europe. Growth by our take acquisition is an effective way to build out business models, but is a strain on company culture - we have yet to see how these will pan out in the long term. 500 employees makes Oberon Media the largest independent casual game company in the world. With aggressive fund raising and business expansion, Oberon Media is quickly becoming the most prominent multi-platform casual games company. more information

Corporate Press Releases: www..com/company/press/index.html. more information Erik Goossens, “Games Selection, What’s The Right Balance?”, Casual Connect Magazine, Summer 2007, pg 13, http://mag.casualconnect.org/. Chris Houtzer, Daniel Prigg, “Beyond Downloads”, Casual Connect Magazine, Winter 2007, pg 21, http://mag.casualconnect.org/. David Nixon, “Brainstorming”, Casual Connect Seattle 2007, http://podcasts.casualconnect.org/. Michel Maas, Cover Illustration and About the Cover, Casual Connect Magazine, Winter 2007, http://mag.casualconnect.org/. David Nixon, “Brainstorming”, Casual Connect Magazine, Fall 2007, http://mag.casualconnect.org/. David Dunham, “Secrets of Casual Game Development”, Casual Connect Seattle 2007, http://podcasts.casualconnect.org/. Tony Leamer, “The Long Tail”, Casual Connect Magazine, Winter 2007, pg 20, http://mag.casualconnect.org/. Garrett Link, “Where Did We Come From”, Podcast and Presentation, Casual Connect Seattle 2007, http://podcasts.casualconnect.org/. Ethan Clark, “Core Values of the Casual Industry, interview with Scott Bilas”, Casual Connect Magazine, Fall 2006, pg 12. “Portal Review”, Podcast and Presentation, Casual Connect Seattle 2007, http://podcasts.casualconnect.org/. Casual Games Market Report 2007 45 Casual Games Market Report 2007 46 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. This section includes profiles of companies who participated in the Casual Games Market Report 2007 using information supplied to the CGA during data collection. Information and images included in profiles are the property of their respective owners. This section includes profiles of companies who participated in the Casual Games Market Report 2007 using information supplied to the CGA during data collection. Information and images included in profiles are the property of their respective owners.

Activision Corbomite Games http://www.activision.com/ [email protected] http://www.corbomitegames.com/ [email protected] Headquartered in Santa Monica, California, Activision, Inc. is a leading worldwide developer, publisher and distributor of interactive Corbomite Games is a young and innovative independent Israeli game developer, located in Tel-aviv, Israel. We believe that games should entertainment and leisure products. Founded in 1979, Activision posted net revenues of $1.5 billion for the fiscal year ended March 31, inspire the mind, and soul, and we much prefer to have you laugh and love than shoot stuff, so we’re creating exactly those kinds of games. 2007. Activision maintains operations in the U.S., Canada, the United Kingdom, France, Germany, Ireland, , Scandinavia, Spain, the Corbomite Games is working on three advanced casual game titles: Zbang, Pizza Morgana, and Falfel man, all based on successful Israeli Netherlands, Australia, Japan and South Korea. Activision is a leading publisher and distributor of casual games into retail locations. comics series. Alawar Entertainment doof http://www.alawargroup.com/, http://www.alawar.com/ [email protected] http://www.doof.com/ [email protected] Alawar Entertainment has specialized in the development, publishing and distribution of casual games doof is a cutting edge web application dedicated to playing games, meeting people, friendly competition and having fun. Bursting with since 1999. The company has published more than 150 titles, won fans all over the world and is the games and cool ways to meet and beat others, doof is a pioneering social web application wrapped up in a visually stunning package. biggest provider of casual games in Eastern Europe. Many of Alawar’s releases, including the Magic Ball series, Stand o’ Food and The Treasures of Montezuma, are among the most popular offerings online. Alexander Lyskovsky Sergey Zanin Today, Alawar works with more than 50 developers, providing a full range of services that includes pro- Founder & President Founder & VP duction, distribution and marketing for their titles. The company also develops it own games through Employees: 92 Eastern Europe, 3 North America Dot Red Games Ltd. three internal studios: Alawar Stargaze, Alawar DreamDale and Alawar gameSTUDIO. In-house studios: Alawar DreamDale, Alawar http://www.dotredgames.com/ [email protected] Alawar distributes its offerings via its exclusive network of Websites (www.alawar.com, www.alawar.ru and Stargaze, Alawar gameSTUDIO Dot Red Games Ltd. offers new game content backed with a powerful and all-new , capable of real-time graphic special effects, www.gamextazy.com) and an end-user application that provides free downloads and product updates Mobile games: Alawar NewEdge Mobile real artificial intelligence (AI), networking capabilities, and with future support for 3D content. All these innovative features will be in use (Alawar GameBox). The company’s releases can also be found on the Websites of numerous online to surpass contemporary ‘simple’ game concepts and game engines with new and fresh concepts and an all new game engine capable of portals, including RealNetworks, Oberon Media, Big Fish, Yahoo! Games, AOL, Reflexive, iWIN, Boon- Funding: In August 2007, Finam Investment Holding, one of the largest investment firms high quality visual & audio content along with networking abilities. ty, PlayFirst, Shockwave and others. Alawar NewEdge Mobile provides content for the portable gaming in the Russian Federation, acquired a minority market, while many of the company’s offerings have made their way onto cable set-top boxes. stake in Alawar Entertainment, Inc. enter.tv Arkadium http://www.enter.tv/ [email protected] http://www.arkadium.com/ [email protected] enter.tv is a company founded of former TV professionals and former casual game producers with a track record of 18 years experience in creating games. the goal is to provide a portal and a structure for interactive entertainment that brings together the best of both sides Founded in September 2001 by Kenny Rosenblatt, Jessica Rovello. Arkadium has 49 employees, with 50% them based out of Simferopol, of entertertainment: TV and games. The portal will be opened September 2007 and will provide online multiplayer games with unique Ukraine. Arkadium creates game software for consumer brands, ad agencies, casino operators and online gamers. The company’s growing characters, business models, game formats with live hosts and a new game experience in cooperation with some of Germany’s biggest media library of over 250 game engines are developed using Adobe Flash, do not require a download, operate on 99% of all computers and can companies. be customized to meet any client’s specific needs. Arkadium is deeply involved with the casual games community in the NYC area, and is co- host to the Casual Games Association’s NYC Mingles. More information about Arkadium: Kate Connally, Kyra Reppen, Kenny Rosenblatt, Ex Machina Sion Lenton, “Teens & Tweens”, Casual Connect Seattle 2007, http://podcasts.casualconnect.org/. http://www.exmachina.nl/ [email protected] Ex Machina enables multiplayer cross-platform gaming. We offer a platform to allow real multiplayer gaming on any connected device, Bamtang Games anywhere, anytime. Our Julius 4.0 Connected Games Management System provides a complete framework solution for web, mobile and http://www.bamtang.com/ [email protected] broadcast games. Since 2001, Ex Machina has been dedicated to social and interactive entertainment by providing turn-key social gaming technology and services. We can assist media companies and brands in setting up a viable games strategy. And with our network of trusted Bamtang Games is the Peruvian developer that the major TV networks and North American publishers turn to for creative and quality game development partners, we are able to offer you state of the art games. development. Bamtang has a staff of over 35 talented professionals working behind the scenes on some of the most popular web casual games online. Gamelab Bitcasters Inc. http://www.gamelab.com/ [email protected] Gamelab invents new ways to play. A game development company founded by Peter Lee and Eric Zimmerman in 2000, Gamelab’s staff http://www.bitgames.com/ [email protected] of 32 makes up NYC’s second largest and longest-running game studio. Gamelab creates singleplayer and multiplayer online games for a Founded in 1996, Bitcasters is an innovation-driven international media production firm that produces Internet, film and television-based wide variety of audiences, including casual games like the smash hit Diner Dash. Although Gamelab often works with publishers, they have entertainment properties. The company has produced top-rated and award winning games for clients such as Disney, Family Channel, recently self-published a number of downloadable titles, including Out of Your Mind, Miss Management, and LEGO Fever. Miramax, the Charles R. Bronfman Foundation, Cartoon Network and others which have been played over 50-million times. The company More about Gamelab and their creative process can be found in Eric Zimmerman’s articles: “Realities of Running an Independent Game also has one serious game and one 3D MMORPG for kids in production. Studio”, Casual Connect Magazine, Summer 2007, pg 16. “Playing at Work, the Intageables of Running a Game Company”, Casual Connect Magazine, Fall 2007. http://mag.casualconnect.org/ and “Realities of Running an Independent Game Studio”, Podcast and Presentation, Boonty, Cafe.com Casual Connect Seattle 2007. http://podcasts.casualconnect.org/. http://www.cafe.com/, http://www.boonty.net/ [email protected] Founded in 2001 by brothers Roman Nouzareth, Co-Founder and President, Boonty, Inc. Mathieu Nouzareth, Co-Founder and President, Boonty S.A. now has over 100 employees, Games Cafe Inc. between NewYork City, Paris, , Tokyo and Beijing. http://www.gamescafe.com/ [email protected] Boonty is one of the leading casual game platforms in the world. Selling games in 28 countries in the Americas, Europe and Asia, with a catalog of over 1,000 games, over 100 billing systems, The Company: Games Cafe Inc. (“GamesCafe”) is a private company formed in October 2005 engaged in the creation, development, more than 200 partners. marketing and sales of computer games. GamesCafe exclusively focuses on the Casual Gaming market. Our audience is primarily women (85%) and between the ages of 30-60. GamesCafe places casual games into major retail outlets such as Wal-Mart, Target, BestBuy, EB/ Boonty recently launched www.cafe.com, a new solution based around multiplayer and social GameStop, CompUSA and many more. We handle all areas of bringing a title to market, such as PR and Marketing. We also cover all casual gaming with innovative business models based around advertising and iteming paid with Mathieu Nouzareth Romain Nouzareth logistics and costs including ESRB, Design, Packaging, Materials, EDI, Shipping, Marketing, Co-Op/MDF, Storage, Process fees, etc. micro-transactions (MTX). Games are developed by Boonty’s game studio out of Beijing. Casual Games Market Report 2007 47 Casual Games Market Report 2007 48 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. This section includes profiles of companies who participated in the Casual Games Market Report 2007 using information supplied to the CGA during data collection. Information and images included in profiles are the property of their respective owners. This section includes profiles of companies who participated in the Casual Games Market Report 2007 using information supplied to the CGA during data collection. Information and images included in profiles are the property of their respective owners.

Geewa Kalador Entertainment Inc. http://www.geewa.com/ [email protected] http://www.kalador.com/ [email protected] Geewa developed and operates a unique multiplayer community platform for casual games. We work via affiliates mainly but also via our Kalador is a mobile phone games and entertainment company founded in 2000. We offer customers access to premium mobile games own portal www.geewa.com. We have taken the community approach from the start which results in great user numbers – 1 million users and entertainment at our http://www.kalador.com web/mobile storefront. Games are rated and reviewed by professional editors and and 15 million matches played per month, 90 minutes average time spent on-line per day, peak at 10,000 online users. customers alike. Glu Mobile kirkykitty Games http://www.kirkykitty.com/ [email protected] http://www.glumobile.com/ [email protected] At kirkykitty games “where passion rules” we aim to develop fun and addictive games! kirkykitty’s two prong garage business model Glu is a leading global publisher of mobile games. Its portfolio of top-rated games includes original focuses on developing in-house game products and client focused game projects using VC++ (DirectX), Flash and Java at high quality titles Super K.O. Boxing!, Stranded and Brain Genius, and titles based on major brands from partners levels within tight deadlines. including Atari, Activision, Big Fish Games, Konami, Harrah’s, Hasbro, Warner Bros., Microsoft, Greg Ballard, CEO PlayFirst, PopCap Games, and Sony. Employees: 250 Large Animal Founded in 2001, Glu is based San Mateo, California and has offices in London, France, Germany, Yearly Revenue: $46.2 million Spain, Italy, , Beijing and Sao Paulo. Nasdaq: GLUU http://www.largeanimal.com/ [email protected]

Large Animal was founded in January of 2001 by partners Wade Tinney and Josh Welber. Our mission is to create games that are easy to learn and deliver a rich play experience. Gogii Games We want our games to be fun for all sorts of players, even those who don’t really think of http://www.gogiigames.com/ [email protected] themselves as gamers. Gogii Games is a casual games publisher working with developers and IP owners to help develop, distribute and license its IP or product Large Animal has made games of all types; puzzle games, celebrity name games, role-playing to retail, online and alternative channels worldwide. With direct relationships at retail and online as well as 15 years in the video game games, action games and word games. In the spring of 2007, we released our 55th game. business, the Gogii staff have a deep network of relationships it uses to leverage your product or IP to consumers and distributors. Our original, downloadable games include Snapshot Adventures, RocketBowl, Saints & ^ Wade Tinney ^ Josh Welber Sinners Bingo, Saints & Sinners Bowling, Jackpot Matchup, TeamUp, AlphaQUEUE, LEGO Gogii has a extensive list of qualified developers that can take an idea or license and create or convert your product from PC to Xbox360, Large Animal’s founders (above) have been an active Bricktopia and Unipong. Handheld or console. With developers, distribution and an incredible pedigree of gaming knowledge Gogii can take your current IP or and positive part of the casual games community, your new product and position it into a successful franchise. volunteering significant amounts of time to a SIG Our new online framework for player customized games, PlayWidgets, supports any type inside of IGDA, an industry association specifically of user-customizable flash game. Players can view and rate others’ games, customize games designed to help developers create better games for with their own photos, send games to friends through email and embed their creations on Games the mass market. any blog or social networking site. http://www.ignite-games.com/ [email protected] We are a company dedicated to the development of video games, with its home office in the sun-filled city of Lisbon, . Being Majesco a group of energetic and highly motivated individuals with the most diverse backgrounds, our games are a direct result of our life experiences and togetherness. Our focus ultimately lies on what gaming should be above all else: FUN! http://www.majescoentertainment.com/ [email protected]

IT Territory Casual Founded: 1996 http://www.it-territory.ru/eng/ [email protected] Employees: 64 North America, 6 Eastern Europe Founded in 2004, IT Territory is a developer and publisher of browser-based massively Revenue: $66.7 million, 2006 multiplayer online games. Along with being Russia’s number one publisher, IT Territory has developed the leading distribution network in Russia and Eastern Europe. A NASDAQ: COOL micropayments system has been utilized in all of IT Territory’s online games, and has proven to be commercially successful. Their micropayment system is currently only in use ^ for the Nintendo DS in Russia, but plans are being implemented to expand it into other markets in 2008. > Nancy Drew for the Nintendo DS IT Territory has successfully launched 13 online games including Legend: Legacy of Headquartered in Edison, NJ, with an international office in Bristol, UK, Company (NASDAQ: COOL) isan Dragons (www.dwar.ru), [email protected] (www.drive.mail.ru), Territory (www.territory.ru), innovative provider of video games and digital entertainment products for the mass market. Currently, Majesco is focusing on the Nintendo The Three Kingdoms (www.3k.mail.ru), and The Bugz (www.zhuki.mail.ru ). More than DS and Wii platforms as they have mass market appeal and rapidly growing installed bases. The Company intends to capitalize on the casual Igor Matsanyuk Alisa Chumachenko 4.5 million users play IT Territory’s games. Founder & CEO Director, ITT Casual game marketplace by licensing and developing games appealing to online and console players particularly for the Nintendo platforms. Our product strategy centers on publishing fun, easy to pick-up-and-play games that appeal to mainstream audiences including women IT Territory handles payments through its centralized payment system, Terrabank (http:// Employees: 250 terrabank.ru), which utilizes a convenient and easy method of converting different types of and families. Majesco has an extensive distribution network and sells directly and through resellers to leading U.S. retail chains. Majesco Yearly Revenue: $24 million money into game currency. also sells products internationally through partnerships with international publishers. Product highlights include Nancy Drew™, Cooking In-house studios: Relish Games (Moscow) and IT Territory Mama and Zoo Hospital™ for the Nintendo DS™ and Cooking Mama: Cook Off for the Wii™ console. Game.Money (launched scheduled in Russia early 2008) will be an integrated payment Nord (St. Petersburg) system for all projects launched by IT Territory and its partners. This independent payment Portals: Lolo (lolo.ru) casual portal; PLAYIT (playit.ru), system will allow online-players to: intergame casual games for online players; Games.Mail. Merscom • Make interest-free transfers Ru, the largest online games portal in Russia; World of • Pay for games and services connect to the Game.Money system Heros (woh.ru), the biggest online games community in http://www.merscom.com/ [email protected] • Transfer funds to other player interest-free the ru zone. Merscom is a global publisher of casual video games that distributes through multiple channels, platforms and revenue models. Channels include retail distribution in the US and Europe, online sale through major portals worldwide and games on Xbox LiveArcade. Merscom is developing titles for XBLA, WiiWare and PSN network, as well as handheld platforms. Along with creating its own Intellectual Property, Merscom publishes games from leading casual game developers. Merscom produces entertaining products for gamers of all ages and guarantees all customers a great experience with its ~Fun Guarantee.~ For more information visit www.merscom.com.

Casual Games Market Report 2007 49 Casual Games Market Report 2007 50 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. This section includes profiles of companies who participated in the Casual Games Market Report 2007 using information supplied to the CGA during data collection. Information and images included in profiles are the property of their respective owners. This section includes profiles of companies who participated in the Casual Games Market Report 2007 using information supplied to the CGA during data collection. Information and images included in profiles are the property of their respective owners.

Mystery Studio Reach Media Ltd. http://www.mysterystudio.com/ [email protected] http://www.reachgames.com/ [email protected] A technology and engineering oriented game developer with a 5-year track record. We develop and publish our in-house games while also offering art, programming, and full “design document to finished game” services. Mystery Studio has developed several hit casual games, Reach Games develops, often with other developers on a co-development basis, casual games for the online and download play space. including Betty’s Beer Bar (one of the first Time Management games online), Wild West Wendy and Pirate Poppers. Reach Games prides itself on delivering high quality work at cost efficient prices to other developers and publishers that require reliable delivery dates for their modelling, art, and animation game assets. We are both a service company to other developers, and a co-developer Ocean Media of our own intellectual property in the casual games space. http://www.oceanmedia.hr/ [email protected] Rebel Monkey Ocean Media was founded in summer 2006, with its office in Croatia. The company is dedicated to developing awesome games, always http://www.rebelmonkey.com/ [email protected] bringing something new to the gameplay. Their games feature nice graphics and sound, but they are also determined to always push the technology beyond established standards. Ocean Media team have developed probably the best 2D physics engine for casual games. Rebel Monkey, Inc. is a new casual games company with headquarters in New York City. Founded by a couple of casual game industry vets, the focus of Rebel Monkey Orange is on creating the next generation of original, high quality games to entertain and entice audiences worldwide. The Rebel Monkey founders are both actively involved http://jeu.orange.fr/, http://www.francetelecom.com/ [email protected] in the casual game development community. Nick Fortugno is best known as Lead Orange.fr is the n°1 casual gaming portal in France, according to Nielsen. Backed up by Orange’s massive reach (9M broadband customers, Designer on the original Diner Dash. Margaret Wallace was previously Co-Founder 92M mobile customers worldwide), we also benefit from a very user friendly system which recognizes our portal customers automatically and CEO of Skunk Studios in San Francisco. and allows them to purchase in just a few clicks through ISP invoice. We’re focusing on growing our business through community services and converging (web/mobile) offers, as well as trying out new business Margaret Wallace Nick Fortugno models. Our games department (GOA) is also a leading publisher and operator of “hard-core” (DAOC, Warhammer Online) and “middle- range” (www.goa.com) online games in Europe. (editor’s note: in other parts of this report, Orange is referred to as France Telecom) Outrix Corp. http://www.reflexive.com/ [email protected] http://www.outrix.com/ [email protected] Founded in October of 1997 by Ion Hardie, Ernie Ramirez, Lars Brubaker, and James C. Outrix Corporation is a distributor and developer of casual games and other multimedia products. It was founded in 2005 and since > Ricochet Xtreme, released in 2003, Smith, with one goal in mind, to make great holds the honor of being the game then its products have successfully entered American, Japanese, German, Canadian, Russian and other PC product markets. Outrix games, Reflexive Entertainment’s passionate residing in the Top 10 of RealArcade distributes games and other multimedia products through online and offline channels, including company portals Gambana (http:// focus on game design has led to the creation for the longest period of time for 532 www.gambana.com) and Lacombo (http://www.lacombo.com) and its affiliate network. To present day, Outrix created 3 games and over of many top-selling and award-winning games weeks. 20 screensavers on different themes. including the Ricochet and the Big Kahuna franchises (with over 40 million total downloads) PRIZEE.COM S.A.R.L. and the 2006 Downloadable Game of the Year, Wik: Fable of Souls. > Big Kahuna Reef, a hit game of 2005 http://www.prizee.com/ [email protected] In addition to developing games, Reflexive Prizee.com, founded in 2000, is a portal in which: 1. 30 games are available, 2. For each game played, Bubz (our virtual money) can be has created one of the largest casual game ^ Wik Fable of Souls was a critically ac- won and converted into presents through our Gift Shop, 3. A special event takes place every week and new games are launched regularly. distribution networks in existence with more 4. Our business model is based on the resale of extragos for games through several types of micro payment. Prizee.com counts over 15 claimed platformer released by Reflexive than 500 affiliates distributing a huge catalog of on the PC and Xbox LIVE Arcade. It rein- million registered players and 2.5 million visitors per month. According to Panel Nielsen Source (Feb. 2007), we are the second best on over 800 games to a rapidly growing audience forced the commitment of Reflexive to try the online entertainment segment in France regarding the number of pages viewed. that downloads millions of games each week. new and innovative products. PiddlePup Games http://www.piddlepup.com/ [email protected] Sarbakan Small game developer with focus on family friendly games. http://www.sarbakan.com/ [email protected] Sarbakan is an original and licensed online/casual game developer based in Quebec City, Quebec, Canada. Founded in 1998 by Guy Playrix (Terminal Studio) Boucher and Richard Vallerand, Sarbakan has so far delivered 500 games to clients such as Warner Bros. Online, Nickelodeon, MTV, Sony, http://www.playrix.com/ [email protected] Groupe TF1, and Vivendi-Universal. Sarbakan’s most widely known original properties are Steppenwolf, a 28 episode Web game licensed Playrix was founded in November 2001 as Terminal Studio, and is an independent casual games developer and publisher. The exclusively to Warner Bros. Online; Arcane (a Warner Bros. Online exclusive), Good Night Mr. Snoozleberg; and Firechild (an AOL RED company has earned itself good reputation among game fans with some innovative and successful puzzle titles, such as Atlantis Quest, exclusive). In 2006, Sarbakan launched a new division to tackle advergame projects, SBK Interactive. SBK Interactive has developed many Brickshooter Egypt, The Rise of Atlantis, etc. By closely following the developments in the industry and the market we are able to projects for major international companies such as Hasbro, Mattel, Chrysler, Nestlé, Volkswagen, and Kraft. Sarbakan also offers PC and embrace the changes and deliver the most relevant product using our flexibility and expertise. The current strategy is to continue to Nintendo DS development services. Sarbakan currently employs 100 people, making them one of the largest independent developers. pick up the production level and introduce innovation in the ‘well-tested’ casual game genres. We are always open to new partnerships and business ideas. SDA Software Associates Inc. QuizArt http://www.sdaworld.com/ [email protected] http://www.triviabox.com/, http://www.quizart.com/ [email protected] Outsourced software development done well. SDA Software Associates specializes in outsourced product development and outsourced QuizArt is a skill games solution provider. In operation since 2004, QuizArt provides skill game platforms that support the operation of development. We provide solutions to many industries, including the casual games industry. We offer commercial multi-player gaming websites for fun and for cash play. The QuizArt technology includes support for rich content games such as trivia middleware (SDA Game Framework tools and libraries) as well as full-service outsourced casual game development. games. QuizArt is constantly developing new and unique games. Casual Games Market Report 2007 51 Casual Games Market Report 2007 52 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. This section includes profiles of companies who participated in the Casual Games Market Report 2007 using information supplied to the CGA during data collection. Information and images included in profiles are the property of their respective owners. This section includes profiles of companies who participated in the Casual Games Market Report 2007 using information supplied to the CGA during data collection. Information and images included in profiles are the property of their respective owners.

Sharendipity Wahoo Studios, Inc., NinjaBee http://www.sharendipity.com/ [email protected] http://www.ninjabee.com/ [email protected] The Sharendipity platform brings intuitive software creation tools to individuals with great ideas, and provides an infrastructure for that Wahoo Studios, founded in 2001, established NinjaBee as a brand name in 2004 to showcase our independent, self-published games. The content to be monetized. The web-based platform brings together creative people in an online community to build software applications NinjaBee label was first placed on our award-winning PC game, Outpost Kaloki. We have gone on to create several games for the Xbox Live in a broad range of areas. Our goal is to empower individuals who do not have software development experience or resources to create Arcade service, including Outpost Kaloki X, and Band of Bugs. With 35 employees, Wahoo Studios continues to do work for applications including casual games. Individuals can create whatever they imagine! hire development contracts with leading publishers.

> Slingo Game- Slingo show broadcast on Word of Mouse Games, Snood http://www.slingo.com/ [email protected] television is aired in http://www.womgames.com/, http://www.snood.com/ [email protected] Philippines Slingo was founded in October of 1994 by a retired real estate developer. The original Slingo game Word of Mouse Games, founded in 1996, is the publisher of Snood, Snood Towers, Snood Slide, Snoodoku and several other great games. concept took over one year to develop and was done in the basement of the CEO (usually in the We merchandise the Snood characters and license our games for various platforms. Our “Snood” brand is unique in a marketplace filled wee hours of the morning) on a mechanical 5-reel slot machine with dry erase boards and over with colored stones, balls and marbles. Snood is one of the most popular computer games in the world. We like to tell newcomers that 2500 pages of looseleaf paper. The hard work paid off, Slingo has become one of the most played Snood is the most popular game they’ve never heard of! :-) casual games on the internet - with over 3 billions games played. With partners America Online, IGT, Funkitron, Oberthur Gaming Technologies, Pixel Play, The United States Playing Card Company, I-Play Technologies and TVcompass, Slingo has a broad and evergreen brand recognition. xBlitz Entertainment Slingo has successfully licensed to partners world-wide for use with: online game sites, downloadable http://www.xblitz.com/ [email protected] games, instant lottery tickets, casino slot machines, casino table games, broadcast and cable television xBlitz Entertainment is a publisher committed to family-friendly casual games. We believe that games were made to put a smile on your face. and mobile phone games. Slingo proves that with hard work - and being a stickler for details will Since 2005, we’ve offered only the best in casual games on our web portal. This year marks our debut title, “Wriggle Words” for pc. And for enable developers to create long lasting and lucrative brands. More about Slingo: Eric Lamendola, < Slingo has sold over 2008, our US/China team is currently developing our first mobile game. It’s true, casual games really are serious fun! “Creating Using and Protecting IP”, Podcast and Presentation, Casual Connect Seattle 2007. http:// 250 million scratch podcasts.casualconnect.org/. lottery tickets XGen Studios

SomaTone Interactive Audio http://www.XGenStudios.com/ [email protected] http://www.somatone.com/ [email protected] XGen Studios is an independent developer & publisher focused on the casual games market. Committed to delivering highly addictive and SomaTone Interactive Audio, founded in 2003, is the #1 provider of audio for Downloadable Games. We provide original music scores, viral gaming experiences, XGen works with an internal team as well as external developers to bring innovative games to an international sfx, VO and integration services for most of the top publishers and big developers. With over 150 downloadable games a year coming audience of millions. Since its inception in 2003, XGen Studios has launched 5 highly successful in-house titles in addition to publishing through our studios and a staff of 24 composers and 10 sound designers, we are experts at knowing how to appropriately and effectively dozens of 3rd party titles. XGen currently employs an internal team of 7 developers, artists & marketing staff and maintains active partnerships create audio for downloadable/casual games on the PC, XBLA, Wii, DS, Mobile, etc. in a publishing role with numerous other studios and teams. XGen has received three of FHM Magazine’s “100 Greatest Games” awards for , Fishy, and Stick RPG. XGen games are featured on the web’s largest portals including MTV, Shockwave.com, Teravision Games MiniClip, Virgin Games, FHM and Channel4. http://www.teravisiongames.com/ [email protected] Zapak Digital Entertainment Limited Teravision Games (http://www.teravisiongames.com/) is a spin-off created from Teravision Technologies (http://www.teravisiontech. http://www.zapak.com/ [email protected] com/) which was created in 1998 as a software development outsourcing company. For the last 6 years Teravision Technologies has worked with important clients both in North America and Latin America providing top quality web-based business applications. As This full-service Gaming Entertainment Company is a part of the Reliance ADA Group. Zapak Digital Entertainment Ltd intends a complete products developed and skills evolved new areas of expertise started to emerge resulting in the creation of Teravision Games back in roll out of its services in 3 phases. The first phase of the portfolio has witnessed the launch of Zapak.com - India’s largest gaming portal. The 2004, a division dedicated to providing 3D art and gaming outsourcing initially for mobile and online casual games and now for current second phase saw the roll out of Zapak Gameplexes – exclusive gaming café’s across the country which is already operational in 10 cities and next generation consoles and PC. Teravision Games’ headquarters are located in Orlando, FL with a development center located in and looking to expand to 20 cities in next 5 months and in the third phase Zapak Digital Entertainment Ltd. would introduce Massively Latin America (Caracas, Venezuela), having an ideal near-shore/in-shore combination and giving clients the advantages of dealing with a Multiplayer Online Games (MMOG) – the rage in online gaming worldwide. local American company with the cost savings of the off-shore approach. In addition to this big advantage the time zone in Caracas is EST Zapak presents India’s largest and highest-quality game catalog with over 500 games on offer. The site is designed to offer an exciting allowing us to have a maximum of 3-4 hours difference with any client in North America. All artists and programmers are well versed in gaming experience across multiple genres, suitable for all age groups, for free.From world-class content to innovative Indian titles it’s all English and most of them have studied in the US reducing to a minimum any cultural gap or language barrier. Besides these competitive there at www.zapak.com, making playing online games an exciting experience. Zapak provides opportunity to developers worldwide to advantages the skills and quality meet worldwide standards, the communications process is very stretch, fluid, and continuous. develop online & downloadable games for Indian audience. Zapak plans to spend $10 million in content acquisition in year 2007-2008 Torpex Games GET INVOLVED NEXT YEAR http://www.torpexgames.com/ [email protected] The profiles in this section represent the subset of the companies who participated in this year’s survey who indicated we could publish Torpex Games is a startup game developer in Bellevue, . We will publish our first game, “Schizoid”, on Xbox Live Arcade in information about their company. Participation by companies in the casual games industry makes our research reports as accurate as 2007. “Schizoid” will be the first commercially released game using Microsoft’s XNA technology. Torpex Games was founded in 2005 by possible, so we thank everyone who gave us this valuable information. video game industry veterans. You can email us at [email protected] for more information about participating in the Casual Games Market Report 2008. VMC http://www.vmc.com/ [email protected] PROFILE CONTENT VMC is North America’s largest outsource testing provider for electronic games publishers and developers. As the preferred provider for Full page profiles were written by and edited for content by the Casual Games Association. Partial page profiles were written by the Xbox LIVE Arcade product certification, VMC plays an important role in the delivery of games onto online console platforms. presenting company; the reader should verify the content of the partial page profiles.

Casual Games Market Report 2007 53 Casual Games Market Report 2007 54 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Pre-print preview. Do not distribute. Do not quote. About the Casual Games Association Methods and Disclosures All About Us

The Casual Games Association is an international organization with a membership CGA Contacts Disclosures of more than 4,000 gaming executives, publishers and developers. Dedicated to The Casual Games Association’s Casual Games Market Report 2007 (“Report”) is for informational purposes only. The Casual Games Association’s Casual promoting casual games for general consumers and providing educational resources Games Market Report 2007 contains current opinions and estimates which may change at any time based on information available to the Casual Games Association and should not be used as the sole basis for any investment or strategy decisions. While the data includes in the report is derived from reliable for game development, the association hosts annual conferences in Seattle, Kyiv, Conference & Magazine Sales sources, it is dependant on the accuracy of data reported to the Casual Games Association. The reader is responsible for verification of information enclosed in and Amsterdam (moving to Hamburg in 2009), publishes a magazine three times Luke Burtis this report and the Casual Games Association does not guarantee or warrant the accuracy or completeness of the information. The Casual Games Association is a year, and issues research reports on the industry. The association was founded in [email protected] not responsible for oversights in opinions or data. 2005 by members of the casual games industry. +1 425 417 5241 (GMT-8) The Casual Games Association’s Casual Games Market Report 2007 is funded from the Casual Games Association’s general budget, no specific financial The Casual Games Association is focused on providing educational resources and Magazine Submissions consideration was given by any individual company mentioned in this Report for the production of the Report. The Canadian Consulate General of Seattle community support for the entire gaming industry—to bring together developers, Daisy Legault provided funding for this Report in exchange for a logo on the inside cover of the Report and on the outside of the mailer to Casual Games Association’s members and general members of the press. The Casual Games Association received no payments from companies to be listed in the company profiles or to publishers, and distributors in order to achieve the common goal of a stable and [email protected] healthy global casual games market. have their properties highlighted in the Report; determination of who was included was based on the Casual Games Association’s estimation of importance in the casual games industry and adequate information provided by companies to complete profiles of their company or their properties. Significant portions of Conference Content Submissions the Casual Games Association (CGA) operating budget arrives from Macrovision, MumboJumbo, RealNetworks, King.com, Electronic Arts, PopCap Games, The Casual Games Association is focused on the long term growth of creating games Tennille Forsberg Microsoft, Big Fish Games, MTV Networks, Sandlot Games, iWin.com, Oberon Media, IT Territory, Enkord, Alawar Entertainment, Absolutist, Freeze Tag, for a diverse demographic, with primary emphasis on: [email protected] Boonty, Fresh Games, Reflexive Entertainment, Merscom, Funkitron, Lifetime, PlayFirst and JoJu Games. Because of the position of the CGA in the casual 1. Educational Resources to ensure that our industry has an effective and games community, nearly without exception all companies listed in this report have contributed funds or services to the CGA in exchange for educational, promotional and marketing services. productive workforce. 2. Community Support to help get deals done and to ensure that everyone has The primary analyst or immediate family of the primary analyst who prepared this Report have financial interest in PopCap Games and other technology industry the network and resources to succeed. securities in a managed fund including but not limited to Viacom, Electronic Arts, RealNetworks, Activision, UBISoft, Microsoft, Nintendo, and Sony,

3. Visibility to encourage professionals to view casual games as a viable career Primary Analyst: Casual Games Association, Managing Director, Jessica Tams option; and members of the public to view casual games as a viable past Secondary Analysts: Pearl Research, Managing Director, Allison Luong & Screen Digest, Games Analyst, Piers Harding-Rolls time. Editing & Research: Casual Games Association, Angeline Fowler Editing: Casual Games Association, Peter Watkins, David Oro, Luke Burtis and Robert Rix 4. Promote Collaboration to encourage industry standards and efficiency. Methods Membership This report’s analysis is generated through an exclusive online survey conducted by Pearl Research on behalf of the Casual Games Association, in-depth Membership in the Casual Games Association is open to those interested in electronic interviews with industry stakeholders, extensive online and offline data collection, and the Casual Games Association’s vast knowledge base and cultural games for the mass market consumer. There are a number of different membership understanding of the interactive entertainment markets. options: Primary Research: A representative group composed of corporate members of the Casual Games Association and other companies within the casual games 1. Corporate Membership. Companies may join the Casual Games industry were assembled in early 2007. A significant portion of the group was recruited through personal contacts with industry stakeholders to ensure the fullest Association by participating in an industry initiative with financial support participation possible. Using these resources, the Casual Games Association hopes to create representation which reflects the wide range of companies currently or volunteering corporate staff. We advise companies to contribute in-line operating within the casual games space. with their prominence in the casual games space, but no level of payments are forced. All employees of the company are given full membership access. Some of the primary data in this study was collected through questions in this password-protected online survey. Questions covered relevant issues and metrics Contact Luke Burtis for more information. within the industry including company profiles, revenue, costs, top titles, number of casual game downloads at portals and similar information. The survey was maintained and the raw data was compiled by an independent research firm Pearl Research to avoid any conflicts of interest. Relevant data points were provided 2. Personal Community Membership. Community Memberships are available to the Casual Games Association for inclusion in the report. The Casual Games Association employees, advisors and directors did not handle any confidential for free to anyone interested in games for the mass market. Programs and data directly. services offered to community members are paid for from the Corporate Membership fund. Community Members receive three magazine issues The text in this study was based on extensive stakeholder interviews and CGA’s existing knowledge base of the industry. each year and full access to conference slides and podcasts. To register as a Secondary Research: To supplement primary data gathering, information was gathered from various secondary sources including company annual reports, Community Member visit: financial filings, governmental agencies, the specialist trade press and other relevant sources. http://www.casualgamesassociation.org/for_professionals_sign_up.php.

3. Personal Supporting Membership. Supporting Memberships are Special thanks to Big Fish Games for having the best screenshots online, we used many of them. available for professionals inside of electronic media who are interested © 2007 Casual Games Association. All rights reserved. Reproduction in whole or part of the Casual Games Market Report 2007 is strictly prohibited. Casual in doing their part to support the Casual Games Association. Supporting Games Association and the Casual Games Association logo are trademarks of the Casual Games Association. All other photographs, logos, screen shots, Memberships are included with all conference passes or by volunteering company data, product names and company names mentioned herein may be trademarks of their respective owners. Screendigest data is the sole property of for an industry initiative. Supporting Members receive three magazine Screendigest and must not be copied or used without consent (www.screendigest.com). Pearl Research is the sole property of Pearl Research and must not be issues each year, yearly Casual Games Market Reports and full access copied or used without consent (www.pearlresearch.com). to conference slides and podcasts. Those who are interested should Companies inside of the entertainment business may use information in this report for internal purposes and with partners, potential partners, members of the sign up for the mailing list for notifications of events and initiatives: press may quote the Casual Games Market Report 2007, data and information contained in this Report must NOT be used for commercial purposes including but http://www.casualgamesassociation.org/for_professionals_sign_up.php. not limited to commercial research reports. Please ask permission before using data if you have any questions. Regrettably, because of the confidential nature of our data collection, we can not provide more detailed numbers about the market than those included inside of this Report, so don’t ask. Those who violate these rules will have bad karma for 12 years and will get in trouble. Email us at: [email protected].

Casual Games Market Report 2007 55 Casual Games Market Report 2007 56 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Pre-print preview. Do not distribute. Do not quote. Pre-print preview. Do not distribute. Do not quote. Glossary 2008 Calendar Sound like a pro

Advergame and are monetized using the Trial-to- Portal An electronic game with integrated Purchase payment method. Companies with websites that focus on Casual Connect Europe 2008 branding or brand messages from an Exclusive the delivery of casual games to consum- Amsterdam, Netherlands, 6 - 8 February 2008 advertiser. Typically advergames are The act of a content owner granting ers via digital distribution. amsterdam.casualconnect.org created around just one brand and sole rights to the distribution of con- Subscription Winter is the prime time to visit Europe to meet with partners and see the city’s shimmering lights - when tourists are scarce. 2008 will be the offered to consumers for little or no tent to one party. Typically developers Unlimited play in exchange for a fixed money in an attempt to build brand final year in the city that launched the Casual Games Association, so if of casual games give sole (exclusive) monthly fee. May also refer to the a trip to Amsterdam is in your future, make it in 2008. awareness. distribution rights to their publishers ability to select one game for purchase Aggregator in exchange for funding and logistical each month for a set fee. A company who gathers the right to support. Portals secure sole (exclusive) Skill-based Games distribute games from many different distribution rights for content they Players pay a small entrance fee to developers and publishers for distribu- believe will give them a competitive participate and compete against other Casual Connect Seattle 2008 tion on websites, mobile phones or in advantage for a fixed amount of time. consumers in a game of skill. The Seattle, Washington, 23 - 25 July 2008 retail. Distributors and portals then Fulfillment player who wins the contest is awarded seattle.casualconnect.org may work with just one point of contact Delivery of retail product from manu- the collection of entrance fees minus The hub of the Pacific Northwest, Seattle isown kn for beautiful to acquire a plethora of content. facturing to retail locations. a small transaction fee retained by the summers, evergreen landscapes – the city is also ground zero for the casual games industry. More casual game consumers purchase games Conversion Rate Game-Sales-Charts.com operator. Ratio of downloads to purchases. For from publishers and distributors in the Pacific Northwest than any Website created by James C. Smith to Top 10 other area in the world. In fact, over 60% of the Top 10 Games in 2006 example, if a casual game is download- track the Top 10 sales charts on online List displayed on portals representing were developed or published by companies in the area. ed 100 times from a website and has 2 website portals. the most popular 10 titles on their por- purchases, the game is said to have a tal. Top 10 lists are especially important 2/100 = 2% conversion rate. In-game Advertising Casual Connect Kyiv 2008 Advertising displayed during gameplay in casual games because of the limited CPM typically with a rich media display be- screen space. For fun with the Top 10 Kyiv, Ukraine, October 2008 “Cost Per Thousand”. Cost to advertiser tween levels or integrated into game- visit www.game-sales-charts.com. kyiv.casualconnect.org per thousand online ad impressions. play. Trial-to-Purchase Kyiv, in the Ukraine, is a modern historical city located between Eastern Advertisements can be either graphical and Western Europe. Eastern Europe is known for excellent school IP Games are download using a web or text. (note: the Roman Numeral for browser, a console browser such as systems that emphasize math and sciences, while fostering creative The intellectual property that results thinking. Travel to the Ukraine does not require a VISA for EU and Thousand is M) Xbox LIVE Arcade or on a mobile from building a game, including the USA citizens. Tetris and about 30% of the Top 10 Games in 2006, were Developer concept, the object code, the source phone. Consumers are allowed to play partially developed in Eastern Europe. Individuals or companies that dream- code, and all the legal assets such as the game for a trial period, typically 60 up the concepts, write the code, com- copyrights, trademarks, and occasion- minutes for online games, and feature pose the sounds and music, create the ally patents. limitations for console games. After Casual Connect Europe 2009 art and generally bring to life a play- the trial has expired, consumers may Hamburg, Germany, February 2009 able game. Developers either self-fund Merchandising purchase the game. europe.casualconnect.org The act of selecting which merchan- new games or work with a publisher to Value Chain The Casual Games Association’s Winter conference, Casual Connect dize to display to the end consumer. Europe: West 2009, will be held in Hamburg, Germany - the Western provide funds and logistical support. The abstract term for the flow of European hotbed for media, technology and casual games. Hamburg Distributor Monetize, Monetization resources, money, responsibility and How the supplier and creator of goods is located in Northern Germany between Amsterdam and Copenhagen Companies which possess the rights to workload among the entire industry. and is the principal port of Germany with over 2,000 bridges dotting the distribute content to consumers which or services receives money from the plethora of city canals. consumer. Web Game provide technical support and content Games which run directly from a to end consumers on behalf of a portal. Publisher consumer’s web browser. While Java, Downloadable Version Companies that pay developers to Flash, or an ActiveX control such as A version of an electronic game which build games—either to their specifica- igLoader may need to be installed for Conference Podcasts & Slides are available online: http://podcasts.casualconnect.org/ supports the ability to be downloaded tions or to the developers’—and in the game to be functional, no files Casual Connect Magazine is available online: http://mag.casualconnect.org/ from a website, console browser or mo- return own the resulting IP. from the game are typically stored on bile phone and then installed directly the consumer’s local computer. Mass Market Corporate Participation Content Submissions on the customer’s device. Download- The general consumer—not discrimi- Luke Burtis [email protected] able games are typically able to be nating or targeting any one demo- [email protected] played without access to the internet graphic. +1 (425) 417 - 5241 (GMT-8)

Casual Games Market Report 2007 57 Casual Games Market Report 2007 58 © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. © 2007 Casual Games Association. See last section for full copyright, trademark and important disclosure information. Pre-print preview. Do not distribute. Do not quote. we are ALL CASUAL GAMERS conversations with casual gamers

Q: Why do you play? Amy, 62, F (amy116): I play to keep my mind sharp. Brandon, 37, M (gocubs): I play solitaire to pass time at work. Stacy, 46, F (lolcatz): I play for relaxation and some “me time”. Bjorn, 23, M (aggie65): I play for the challenge. Christian, 29, M (seriens): I’m addicted to Zuma. (p.s. I tell my co-workers it is my wife playing)

Q: Who in your family is a gamer? Diane: I’m not a gamer, but my grandson plays his Xbox and Nintendo DS a lot, he is a gamer. Q: What games have you played this year? Diane: Word Whomp, Cake Mania, Diner Dash, Mystery Case Files Huntsville, Prime Suspects, Ravenhurst, Slingo... (and this list goes on) Q: Wait! You said you weren’t a gamer, how many hours a week do you play? Diane: Oh, not much, maybe 10 hours a week. Is that a lot?

Q: What are your favorite games? wendyc: Card games like bridge, solitaire and hearts with my friends online. juiles: Cake Mania, Diner Dash—games where I can take charge! laurel: In grad school, I was totally addicted to Diner Dash. kev: All of the Mystery Case File games.

Our last word: Everyone knows casual games are big business—don’t get too caught up in the hype trying to figure out how much money you can make or definitions and stereotypes of what a casual gamer should be. Creating and distributing games with fun and accessible gameplay is what casual games are all about—and what the consumers are screaming for. Focus on Fun and the rest will come naturally. note: names have been changed to protect the not-so-innocent

CONT ACT

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© 2007 Casual Games Association. See last page for full copyright, trademark and important disclosure information.